In the buy-to-let sector, the role of the broker has never been more important in helping to ensure responsible lending. With greater emphasis placed on customers’ overall financial situation, they must be able to afford the loan both now and in the future.
Rental income continues to be the main way of assessing affordability for buy-to-let but additional requirements such as proof of income, source of deposit and disposable personal income are becoming more commonplace. It is crucial for lenders to know that borrowers can reasonably afford their personal commitments, leaving rental income to support the buy-to-let contract and associated costs.
Brokers can help lenders in various ways: first, by sense-checking the application on the grounds of affordability; second, if the lender asks for supporting information such as that listed above, by making sure any such information is of the correct quality and matches the information provided in the application form; and third, by ensuring the customer is who they say they are, examining payslips carefully for inconsistencies and checking if income is in line with expectations for the role.