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Changing working patterns aren’t supported by automated underwriting
It’s fair to say that our working lives, the way get paid and the jobs we do is changing, recent research by Censuswide revealed that one in 10 UK employees which is approximately 4.5 million people were considering taking a second job or already have done
Official ONS stats suggest there are currently around 1.2 million people in the UK already in this situation, however, Royal London research from last summer, suggested that just prior to this period, 16% of workers which is over 5.2 million people had already taken on an additional job.
Alongside the change in individuals working lives, it is estimated that in June alone, 100,000 households are coming to the end of their fixed-rate mortgage deals. This means they are looking to remortgage in a market which looks very different to when they took their mortgage out 2, 3 or 5 years ago, with rates far higher than they would previously have been on.
At the same time, advisers are likely to see a considerable influx of diverse portfolios and income flows as multiple income sources are now far more prevalent as individuals seek out new ways to bring in more money.
As lenders we have to be on top of this, and that can be difficult for the mainstream and high-street players who are more likely to use an automated underwriting system, rather than being able to underwrite manually as we do.
At Foundation we underwrite manually, which allows us to get a full picture of borrower’s circumstances and consider using 100% of their income sources, whereas other lenders can only use an automatic 50% approach. By doing manual underwriting we can provide positive lending decisions to borrowers.
We certainly want to work with advisers and their clients to ensure they have a seamless remortgage transition and their working and investment decisions are not held against them.
This article was originally published on BestAdvice
References:
https://www.peoplemanagement.co.uk/article/1809546/four-million-uk-workers-considering-second-job-combat-cost-living-survey-finds
https://www.crunch.co.uk/knowledge-employment/id-like-a-second-job-what-do-i-need-to-know#:~:text=According%20to%20the%20Office%20
of,UK%20have%20a%20second%20job.
https://www.royallondon.com/about-us/media/media-centre/press-releases/press-releases-2022/september/cost-of-living-crisis-leaves-millions-taking-on-second-job/#:~:text=16%25%20of%20workers%20(5%2C239%2C360)
,report%20can%20be%20read%20here.
https://www.theguardian.com/money/2023/jun/05
/uk-banks-pull-hundreds-more-home-loan-deals-as-fixed-mortgage-rates-rise
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