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More than 90% of lenders admit brokers bring benefits

The latest numbers from the Intermediary Mortgage Lenders Association (IMLA) showed more lenders recognizing the value brokers bring to mortgage applications.

Asked about the specific benefits speaking to advisers can bring to borrowers, 92% of lenders said it would help non-standard borrowers access a wider range of mortgage products, while 67% felt that borrowers who spoke to an adviser were likely to find a mortgage better suited to their needs.

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Adviser input could also speed up and strengthen applications. Nearly half (46%) of lenders suggested that those who made an application through an adviser were less likely to incur unnecessary delays throughout the process. More than half (58%) thought applications submitted by an adviser stood an overall greater chance of being approved.

The research also revealed lenders taking steps to maintain close working relationships with advisers since the start of the pandemic. Seventy-five per cent (75%) reported they have been working more closely with advisers to help them understand complex product criteria. In addition, 58% have invested in broker training and 54% plan to invest in technology to further support advisers.

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“Good relationships between brokers and lenders are not only key to ensuring that borrowers have access to a broad choice of mortgages to fit their needs, but also in reaching those non-standard borrowers who may have thought a property of their own was forever out of reach,” IMLA executive director Kate Davies said.

“Our research demonstrates that consumers tapping into the expertise of mortgage advisers will benefit from more choice, a better mortgage and a quicker application process that is more likely to be successful.”

By Mary Or

Source: Mortgage Introducer

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Struggling to get a mortgage? Try a broker… or a small lender

It’s mayhem in the mortgage market at the moment due to a paperwork backlog at banks and pent-up demand from the lockdown.

Lenders are making changes to their home loan deals with little or no notice to limit the amount of business they take on.

So that cheap rate you were eyeing up could quite easily be gone tomorrow. Or the terms and conditions may change suddenly, meaning you no longer qualify for a loan you thought had been secured.

Here are four other places to turn if you are caught up in the chaos…

SMALLER LENDERS

Lee Hockins, from Summit Wealth financial advisers, says: ‘It’s virtually impossible at the moment to get a mortgage at 95 per cent loan to value and there are only a small number of lenders offering 90 per cent mortgages – and none of the big ones.’

Lloyds, NatWest, Barclays, Santander, TSB and most recently HSBC have all pulled out of the market for mortgages with a deposit of 10 per cent or less, hammering first-time buyers.

The good news is that smaller regional building societies may be able to help.

Many still assess applications manually, unlike big banks which often use automated underwriting technology which can result in a computer-generated rejection.

Having your application assessed by an individual means your specific circumstances can be taken into account. Try the Buckinghamshire, the Penrith and Stafford Railway.

To find out more about how we can assist you with your Mortgage requirements, please click here to get in touch

BANK OF MUM AND DAD

Popular mortgage deals that allow parents to help their offspring on to the ladder are being cut back too.

But the Bank of Mum and Dad isn’t entirely closed.

After Lloyds shut its Lend a Hand mortgage to new applicants, the main mortgage designed for parental help is Barclays’ Family Springboard deal.

This allows a family member or friend to put at least 10 per cent of the purchase price in a savings account with the bank in place of a deposit.

Ray Boulger, of mortgage brokerage John Charcol, says: ‘The Barclays Springboard mortgage is the best of the deals for people who are getting help. It’s really good value for first-time buyers with either a small or no deposit, who has someone who wants to help but also wants to keep control of their funds.’

Tipton & Coseley Building Society has launched a Family Assist mortgage offering up to 100 per cent loan-to-value mortgages for buyers, so long as a relative has a 20 per cent charge on their own property or puts 20 per cent of the amount borrowed into a savings account.

But some are limiting the amount of outside help allowed. Nationwide recently changed the criteria for gifted deposits, so borrowers who want a 90 per cent loan-to-value mortgage can only be given 25 per cent of the deposit, meaning they have to provide the rest themselves.

A BROKER ON YOUR SIDE

With banks launching and ditching mortgage deals on an almost daily basis, a broker can really prove their worth.

Not only do they often get tipped off in advance when a deal is about to be pulled, they are clued up on the specific criteria that each lender will look for in your mortgage application – and can stop you wasting time. Brokers will also have a good idea how stretched a bank’s mortgage department will be, helping you avoid disappointment when demand is high.

TRY A LIFETIME MORTGAGE

For the over-55s who are retired or approaching retirement, an alternative option is a so-called retirement interest-only mortgage. Boulger says: ‘With these deals, the eventual sale of the property can be used as the repayment strategy.

‘So lenders assess whether you can afford the loan on the cost of paying the interest only in retirement, as opposed to a repayment deal where you have to pay back some of the capital each month.

‘The downside is that if it’s a joint application, lenders have to decide whether, after one partner dies, the surviving partner would be able to support the mortgage from the remaining income.’

Lenders offering this type of mortgage include Nationwide, Leeds, Bath, Ipswich, Loughborough and Tipton building societies.

…OR LET THE CHAOS PLAY OUT

  • Mortgage rates are expected to remain at current levels for some time – but house prices may not.
  • Many experts believe that while prices are heading up at the moment, there could be a fall back when the stamp duty holiday ends in March next year.
  • Remember, if you are buying and selling at the same time, then a fall in the market is likely to impact both ends of the deal.
  • So you may be no worse off if you wait – and find it easier to borrow the amount you need for your next mortgage.

By Sarah Bridge, The Mail on Sunday

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Brokers report buy-to-let bounce

More than half of mortgage brokers have seen an increase in buy-to-let purchase business in recent weeks, according to new research from broker forum Cherryplc.co.uk.

The survey, carried out with Click2Check, found that 57% of intermediaries have seen demand for buy-to-let purchase deals increase, compared to just under 12% who reported an increase in demand for capital raising on a remortgage.

The study found there had been an increase in the number of clients with more specialist requirements. Almost one in ten (8%) brokers saw a jump in demand for HMO purchase loans, while almost 4% have seen a rise in enquiries for lending on both multi-unit blocks of flats and holiday lets.

There has also been a rise in short-term lending popularity, with 8% of advisers working with more clients on sourcing bridging loans for refurbishment tasks.

Donna Hopton, director at Cherry, said it was clear that there has been a spike in buy-to-let activity in recent weeks.

She explained: “Whereas the buy-to-let market has been dominated by remortgage business in recent years, it is purchase enquiries that are currently keeping brokers busy. The window of opportunity for reduced Stamp Duty Land Tax will certainly be helping to drive this demand, but we are seeing that the market is generally buoyant, which is a positive sign for advisers, and the economy.”

Jeff Knight, director of marketing at Foundation Home Loans, pointed to recent research which had suggested confidence among landlords is now higher than it has been in the last few years.

He continued: “This presents a great opportunity for landlords and it’s no surprise that many have seen this period of reduced Stamp Duty as an opportunity to grow their portfolios.”

By John Fitzsimons

Source: Mortgage Finance Gazette