It’s rare that I admit defeat but sometimes, just sometimes, you find yourself in a position where you have to say no to a client.
I don’t like doing it but on those occasions when I am forced to tell clients that we simply cannot obtain the mortgage they require, I usually breathe a sigh of relief at the same time and think that in fact I have probably done them a favour.
We’ve recently had an enquiry from a couple who are first-time buyers. Their incomes are reasonable and they have pay rises due soon. That’s the good news. The bad news is that one of the applicants is only 18 and the other is 23.
They also have a fair number of defaults (some of them incurred just before Christmas) and no deposit to put down, so they need a 100% mortgage – and more if possible.
But the reality of their situation is that even if it was possible to meet their mortgage requirements, there is little property available in their area that would be within their price range.
I wanted to help these clients. Both are living in difficult conditions. The young lady is sharing a bedroom with her 13 year old sister in a flat rented by her single mum while the lad is living with his mother who has a chequered credit history and some significant debt problems of her own. Neither applicant can access a deposit and they are pretty desperate.
Working in a small team can often helpful in situations such as this. Brainstorming a case can often provide a solution you hadn’t thought of, such as coming up with a lender you had not considered or putting a clever slant on the pro-position that could enable you to pitch your clients to an underwriter.
So we brainstormed this case in the office more than once but sadly we could not come up with any compelling reasons to lend. Over several days we kept revisiting the enquiry, checking different criteria but always drawing a blank.
A small but increasingly insistent voice in my head told me that the best advice we could give these clients would be to come back at the end of the year after they’d got their defaults sorted and saved up like mad to build a 5% deposit. So that’s where we’re at.
Although I know this is the right thing for these clients I’m frustrated. I don’t like preaching to them and I don’t like having to give up the fight, even temporarily. I’ve had cases in the past in which I have told clients we can’t help them, only to find that they have gone to their banks and miraculous things outside criteria have happened, but don’t get me started on that subject.
Other clients have taken themselves off to a different broker, given a slightly different set of requirements and their case has been placed with little trouble.
I suppose this is a hazard of being an adviser and at least in my heart of hearts I know the guidance we have given is best advice. I hope these clients will come to understand that we had to be cruel to be kind.