Alliance & Leicester is introducing greater lending flexibility as it moves away from using traditional income multiples to assess how much customers can borrow.
This new flexibility will help more people afford homes that were previously out of their reach and will particularly benefit those with higher disposable incomes and first time buyers.
The move to affordability based lending by the UKs ninth largest lender is supported by a new affordability calculator, available for brokers 24 hours a day, which instantly confirms the maximum amount Alliance & Leicester is willing to lend a customer based on a number of simple questions. It signals a more advanced bespoke lending approach based on customers personal circumstances, such as individual monthly spending patterns and disposable income.
Mehrdad Yousefi, head of intermediary mortgages at Alliance & Leicester, says: “Our new affordability calculator recognises that every individual has different financial circumstances. Whilst many affordability calculators are based on average assumptions of customers disposable incomes according to region, age and number of dependants, Alliance & Leicesters proposition takes this a step further and provides a more realistic and accurate decision based on the individuals circumstances and then offers a maximum loan amount. For some customers this will mean that we can lend more.”
The new affordability calculator provides brokers with a fast reliable indication of the maximum amount Alliance & Leicester will lend to their clients.
If they wish to proceed with the quote they can then obtain a fully credit scored decision in principle online within minutes. This online DIP service has been enhanced to also provide a bespoke maximum loan lending decision and mortgage brokers can print a Mortgage Certificate for their client confirming this figure, which is binding for 28 days. This will provide greater confidence and reassurance to their clients who can use it to demonstrate that they have finance in place to prospective vendors.
Mehrdad Yousefi adds: “Our new approach will benefit brokers by saving them time and enabling them to undertake more business. In a matter of minutes and a few clicks of the mouse, they will be able to provide their clients with a reliable maximum amount that Alliance & Leicester will lend them.”
Mark Chilton, chief executive officer of Purely Mortgages, says: “More and more lenders are changing direction and going down the affordability route. Some calculators are very basic and only have a quick quote facility. However, Alliance & Leicesters new proposition is more progressive and gives a more exact indication of how much an individual can borrow. With the binding mortgage decision on the maximum loan amount, clients know how much they can borrow even before they have chosen their property.”
Alliance & Leicester is also introducing its new affordability based lending approach through the branch network and over the phone.