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Adjusting to change in the Residential mortgage space
Time stops for no one, and neither does the possibility of change. What might seem like an irrecoverable position always has the potential to shift and develop, and for a more positive outcome to be achieved. There will be many borrowers who currently feel like this and require the services of an adviser to help move them to where they need to be.
Change
Within the mortgage market, indeed within the UK economy as a whole, we have recent evidence to show just how swiftly change can happen. A year ago, we were all struggling to come to terms with the post ‘Mini Budget’ period, two years ago Bank Base Rate was at a historical low of 0.25%, three years ago while we were in the midst of the Covid pandemic the mortgage and property market was undergoing something of a boom.
In the residential mortgage space, there needs to be a considerable focus on borrowers’ needs in light of the greater potential for changed individual circumstances as well as interest rates. View how we can help your ‘near-mainstream’ residential clients.
Diversification
Outside of rates, there may have been changes in employment and again this might impact on the borrower’s income and the sources it now comes from. Perhaps during Covid, they were made redundant, perhaps they decided to set up their own business – we know that there has been a significant increase in the number of new businesses set up since that first lockdown – perhaps they went freelance or became a contractor.
Simplification
What we can do as a lender operating in this space, is make the process as easy as possible for both the adviser and the client, take a manual approach to underwriting, which takes their individual circumstances into account and does not simply rely on a tick-box credit score approach that they cannot pass. That way, we can all work together to ensure they have the best product available to take them through the next stage of their mortgage.
These borrowers still have every right to an excellent mortgage or remortgage experience, from a lender who has the level of expertise that allows them to take a risk-based approach to underwriting, for example, not normally needing bank statements, and ideally, with access to pragmatic affordability calculations and cost-effective remortgage solutions.
Adaptation
There is always a lot of change to deal with anyway, so it’s up to us to make sure we get the right outcome for those clients who have seen their circumstances shift in recent years, but even though this is the case, they should still be able access the mortgage finance they need, even if this time it is not through mainstream means.
