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
Chase UK has signed an exclusive deal with Direct auto Financial Services, part of Provident Financial, to restructure the finances of its clients who are in minor arrears. With their permission, Direct auto will refer clients who have equity in their homes but are struggling to afford their outgoings to Chase UK. The packager will […]
Amber Home Loans has launched the first phase of its enhanced online solutions package – an electronic decision in principle facility for intermediaries.
Halifax has upgraded its already excellent extranet website for intermediaries and the more lenders invest in these systems, the better it is for brokers’ profitability, says Frank Eve
Brokers have rebuffed claims that confidence in the mortgage market is falling on the back of growing expectations of a rise in the Bank of England base rate. The BoE’s Monetary Policy Committee last week held the base rate at 4.5% for the 10th month in a row, although many experts confidently predict a quarter […]
Earlier this year, Jelf Employee Benefits mentioned that the then minister for pensions was openly discussing the need for an increase in the minimum level of auto-enrolment pension contributions.
News and expert analysis straight to your inboxSign up