After a glorious summer break, lounging by the pool, if we’re lucky, we return to work eager to know if outstanding cases have inched closer to that holy grail, the mortgage offer.
Unfortunately, the reality is that we are unlikely to be any closer to that grail than before the break, especially when it comes to dealing with lenders.
Allow me to map out the following scenario and see if it sounds familiar to you.
After a five-day wait before the initial assessment of the loan and having provided all the relevant documentation as per the lenders shopping list, further items are then requested.
When returned the case gets sent to the back of the queue, and will not be looked at for a further five working days.
All this before the valuation has even been instructed and final underwrite which will inevitably create further delays. In the meantime the landlord is chasing saying he will lose the property if the mortgage is not offered yesterday.
I’ll hazard a guess it sounds all-too familiar.
These days applying for a buy-to let mortgage can be an exercise in patience. Brokers are getting frustrated with the changing goal posts of lenders. They feel that lenders are intentionally slowing the approval process by creating difficulties and finding reasons not to lend. Landlords are comparing the current climate to the bygone days when an application to offer could happen within a week with no questions asked. Both parties have to accept that times have changed and that this is a different world of mortgage underwriting.
The extended turnaround time is not necessarily a result of a huge influx of business. Instead it is due more to an increase in human intervention in the application process. Additional scrutiny and due diligence and consequently tougher underwriting for the buy to let market is unavoidable, and is a result of both internal and external pressures.
Our role as brokers is to ensure that our client’s journey is as smooth as possible. This involves matching upfront the client’s profile and proposed property details with the lenders criteria. Buy to Let is driven extensively by criteria and if you can get this right from the outset you can help keep turnaround times to a minimum.
Brokers must also ensure that cases are fully packaged with the correct documentation before submitting to a lender. Whilst the above picture suggests that the lender is often the culprit for application delays, the reality is that brokers who present a poorly packaged case have to expect the lender will initiate further follow-up.
As brokers we must share equal responsibility for ensuring a case gets to offer in a timely manner. The extra admin for all parties is an extra cost for processing and reduces our profit margins. We all want to write better quality business and the Industry needs to work together to achieve this common objective.
In current times, brokers should manage expectations and not commit to clients with unrealistic timeframes for offers. It is always better to give a client a pleasant surprise rather than a nasty shock.
BM Solutions are currently still operating with competitive rates and have quick turnarounds compared to other lenders in the market.
The Mortgage Work’s has challenging turnaround times at the moment, but as a quality lender it is working to resolve this. It has also recently stopped regulated buy-to -lets where the property is occupied by a member of the borrower’s family. At the same time they will not allow clients to buy a property from a relative. This seems to be a strategic move to avoid complex family transactions that are not always transparent.