A majority of mortgage brokers value the ability of specialist lenders to ‘take a view’ on applications over time-saving tech, a study by United Trust Bank shows.
The capacity to ‘take a view’ on individual home loan applications was valued by an overwhelming 99% of brokers in the bank’s latest ‘Growing opportunities for brokers in the specialist mortgage market’ white paper, who rated this feature as “very important”, or “vital”.
This was followed by ‘confidence in the case completing’ valued by 97% of brokers and dealing with knowledgeable staff, rated by 95% of intermediaries.
The paper says these qualities among lenders, along with flexible criteria and access to underwriters were more important than tech shortcuts, which were rated “as nice to have rather than a must-have for a majority of brokers”.
At the bottom of the top 12 key lender features among brokers were electronic ID verification, rated by 35%, electronic signatures, 43%, and the cheapest rate, 48%.
Brokers were asked to rate specialist lender attributes and service features from “not important” to “vital” in a poll and in further interviews.
The study adds the key factors differentiating mainstream from specialist lenders are cases are income, credit history, credit score, loan size and property type.
However, 52% of brokers say that “affordability is a bigger challenge for specialist cases compared to mainstream”.
The report adds: “This supports brokers’ wish for more lenders in the specialist sector to be flexible in both criteria and underwriting. Having a more diverse market with plenty of lender choice is enabling brokers to place most cases.
“However, a handful have started to emerge as the ‘go-to’ specialist lenders, those brokers return to time and again with more complex cases.”
Brokers were asked to name the specialist mortgage lenders they used the most – ranging from “a few times” to “a lot” – over the last 12 months.
The top five lenders were:
Joint 1st – Together and United Trust Bank
Joint 3rd – Pepper Mortgages and Precise Mortgages
5th – Kensington Mortgages
The report adds that Aldermore, Kent Reliance, Foundation and The Mortgage Lender also appeared in the list of lenders, which tended to be used “once or twice” rather than more regularly.
United Trust Bank director of mortgages Buster Tolfree says: “The key to successful specialist mortgage lending is building the proposition around real customers from the very start.
“‘Taking a view’ is something you can build into the early stages of the application process, all the way back to what type of properties you’ll lend on, what incomes you’ll support and what credit blips you’ll overlook.
“If you have a good auto-underwrite system loaded with more flexible, common-sense criteria, then you don’t need a human underwriter to look at every specialist case.
“Yes, there will always be some cases where an experienced underwriter should have the final say, and that’s always an option at UTB, but technology can accelerate and simplify the journey for a lot of cases which just a few years ago would otherwise have needed a chat with an underwriter.”
United Trust Bank’s white paper is based on a mixture of independent qualitative and quantitative research among more than 100 brokers carried out over the first six months of this year by Grey Matter Marketing Solutions.