Gary Salter is head of corporate accounts at Nationwide Group Intermediary Sales
It is perhaps one of the most frustrating facts of life for brokers that a huge amount of time and effort can be put into servicing a client, but they only ever receive a financial reward for mortgage applications that go all the way to completion.
House moves can fall through for a host of different reasons, but many often occur due to a change in circumstances, such as redundancy. All the paperwork may be completed and submitted, only for the process to come to a standstill if the client loses their job.
And then there are predictable and avoidable issues, where borrowers are unable to proceed because they have deliberately buried their head in the sand in order to keep their house purchase dream alive.
In such cases, there may be an undisclosed adverse credit history or the stated income cannot be verified.
And undoubtedly, most brokers will have experienced the frustration of a client’s accountant unveiling figures that are completely different to those suggested by a borrower during the application stage.
The welcome news is that at least some of these issues can be avoided with some careful planning.
Rather than simply taking clients at face value, many brokers spend time at the outset, qualifying the information provided by their customer.
This could include asking their client to bring in their credit report, obtained from agencies such as Experian.
This exercise doesn’t just help brokers to prevent possible pitfalls further down the mortgage application process but it also allows them to develop their relationship.
By gathering more information in this way brokers can learn more about their clients and their needs, often leading to a more profitable relationship
Similarly, pitfalls stemming from income verification can be prevented by asking to see a client’s payslips upfront. These can then be cross referenced with bank statements.
Where there is additional income, such as bonuses or shift allowances, lenders need to understand the frequency and likelihood of these continuing and will usually request a number of payslips or a P60 to validate them.
Bank statements can help brokers in a number of ways to ensure the mortgage process is running smoothly.
They can be used to cross reference the information provided by the borrower and also offer an insight into their lifestyle and spending habits.
However, brokers must be aware of forged bank statements.
These can be difficult to spot but there are tell tale signs that give the game away.
Again, this is where it is essential to know your customer as many fraudulent applications have been via other brokers and lenders, with the customer playing a ‘numbers game’, trying to find a broker and lender who may not be quite so diligent.
Brokers should also check if there is anything unusual about a property as there is nothing worse than spending the valuation fee, only to be told the property is outside a lender’s criteria.
A quick check on Google maps will tell you if a flat is above a fast food restaurant, which may lead to problems with the application.
Have you ever asked yourself how many times you process a decision in principle and it turns into a full application and then onto completion?
There is a huge variation between brokers and our BDMs are now able to provide this information at individual broker level.
Feedback so far has been extremely positive as it helps identify trends and allows firms to tweak their business model to ensure maximum benefit from available time.
While the mortgage industry is currently focused on challenges, such as regulation, there are many positives in the market this year.
Many companies are reporting a significant growth in both enquiries and new business, and the challenge here is to focus on the business that creates value, and not waste time on speculative applications.
