According to the IFS, almost 90% of 25 to 34-year-olds face average regional house prices of at least four times their income, compared with less than half of young adults twenty years earlier. If this isn’t challenging enough, just under 4 in 10 young adults faced a house price to income ratio of 10 times compared to just 9% twenty years ago.
Secure the loan size your client wants
The good news is that specialist lenders take a manual underwriting approach to assess your clients’ affordability, which could provide a viable and affordable alternative to the high street.
High street lenders are not focused on offering mortgages to your clients with CCJs, defaults, adverse credit or previous financial difficulties. They are looking for cases fit their credit score threshold that they can process that tick all the boxes on their list of criteria.
Specialist lenders do not base their decisions on a credit score, by not taking the same automated approach that high street lenders have.
Specialist lenders can give more personal consideration to a borrower’s income, which often leads to a fairer, and more often generous lending decision. They are better equipped to consider contractors, company directors, people earning significant bonuses or overtime and clients with multiple layers of income, including investments and different sources of employment.
Have you had a case where a customer may fail a credit score with a high street lender for a high unsecured credit balance?
With a Pepper Money mortgage, unsecured credit doesn’t affect your client’s product tier or their ability to borrow.
The same is true of customers who may have never borrowed prior to applying for a mortgage. A lack of a footprint on a borrower’s credit file could mean a no on the high street due to a credit score fail.
Again, this profile of borrower would absolutely fit a specialist lender, if their affordability fits, and there doesn’t need to be adverse in the background… They will just land on the best product a lender has to offer.
Maximise your client’s affordability
We’ve shared just a few examples of how we can help you find a place for your clients. We’d encourage you to add us to your broker toolkit, especially if you need to maximise affordability through a fairer view on income.
With our more human approach to underwriting, there’s a higher chance of our mandated underwriters looking more favourably to increase your client’s income multiple which could stretch affordability. When submitting a DIP, please give us the full story and background on a case to give your client the best chance of securing the mortgage they need.
Try our Affordability Calculators to get an indication on what your client could be eligible to borrow.
Sources: https://www.ifs.org.uk/uploads/publications/bns/BN224.pdf