When it comes to clients with complex requirements it can be difficult to find a ‘mainstream’ lender who’ll consider the loan your client wants
It can leave you turning to more specialist lenders who might help but it can mean your client has to pay a higher interest rate.
Over the last 2 years we have changed how we’ll look at cases and our approach has evolved to help you to help your customers .We’ve adopted something we grandly call ‘Principle Based Lending’ or to put it another way ‘good old common sense lending’. In other words we’ll try and find a way to lend.
In the last 3 months of 2018, 20% of the cases we accepted had some element which meant we had to use that common-sense approach.
We know that as life becomes more complex, it’s not always easy to find a lender who your clients fit their exact requirements. There’s a host of possible reasons for this. One can be fluctuating income and this can derail an application. So, it’s always great when you can find a lender who’ll show some flexibility for good quality cases.
One example of how we have applied this common-sense approach was for a home mover where we needed to utilise more of the client’s bonus income. The client wanted to borrow just under £700,000 using a basic salary of just over £100,000. His bonus track record fluctuated; he’d received bonuses of £29,000, £65,000 and £45,000 over the last three years. The underwriter was able to agree to the loan the client required using 100% of the most recent year’s bonus as it was lower than the three year average.
To help make sure the more complex cases go through smoothly, our BDMs will work with you, the broker, to get the necessary documents. And when the DIP is submitted the BDM will make sure there’s no hiccup in the changeover to a full application.
We were approached by a broker looking to place a purchase case on behalf of his clients for a large six figure loan.
One of the clients was a partner in a law firm for three years, but had an inconsistent track record when it came to their income. It had fluctuated due to a variety of reasons including employment status and maternity leave. But, the broker knew this was a good case for the right lender and we agreed.
The usual way to prove income is using the applicant’s SA302. In this case, this wasn’t going meet our affordability for the size of the loan required. But the client could provide a partnership letter which confirmed the latest year’s income and future earnings. Our Underwriters, working with the BDM, were happy to use this information when establishing the viable income. So, we could lend the clients the loan they required at a competitive rate.
So when you’ve a tricky case to place, before you go to the specialists, give us a call. You might be pleasantly surprised.
Want to find out more? Then why not listen to our podcast. Iain Cunningham, one of our Corporate Account Managers, speaks to Emma Gilbert, an Underwriting Service Manager here at Accord, about how we put our common-sense approach into practice and how it’s benefiting both brokers and their clients.