Sourcing systems are trying hard to produce systems to search niche market areas such as sub-prime and buy-to-let mortgages but they are mainly used to source the cheapest rates, without taking account of credit history and rental requirements.Borrowers approaching brokers expect a certain level of product and lender criteria knowledge. But intermediaries will always be keen to secure cases and so the pressure is on to get the cheapest rates for their clients. Given these pressures, the inclination is to submit business as soon as possible to the cheapest rate provider. This is great news if cases are accepted. But if brokers follow a Financial Services Authority- style sales process, they may want to offer alternatives and enable their clients to give the proposals proper consideration. Because most lenders use a credit score and search process, if only in the background, the information is not available to intermediaries. If a proposal is declined the next act may be to submit the case to another lender. But which one? The only thing is to keep trying until a lender that will accept the case can be found. So multiple searches if it fits, and multiple searches if it doesn’t fit. Perversely, as ob-taining decisions in principle becomes easier, the effect this has on clients’ credit histories gets worse. Footprints left from these activities can have an adverse effect on credit scores. If an enquiry fails a credit score the lender does not have to say why, so the cycle starts again. As buy-to-let mortgages are not usually regulated there should be no need for multiple searches. The advice given should be on the basis that a client is known to fit scheme criteria and the product is the best for them. Using a specialist packager will ensure that only one search is carried out as its knowledge of lenders’ criteria should ensure that cases are placed with lenders that will accept them. Buy-to-let remains a niche as it requires more knowledge than most products to place. And despite technology, a broker’s experience is the service being bought by their clients. With new lenders coming on the scene and product criteria changing weekly, brokers must stay with the pace and remember that good service does not just mean being quick. Andy Young is managing director of The Business Mortgage Company
Buy-to-let mortgages now form part of most brokers\' armouries. This helps create competition on rates and also forces the pace of product innovation which is good news for borrowers but adds complexity to the role of brokers, as the pace of change is fast.