Brokers were asked at a Home of Choice top account meeting what product innovations would be welcome in the market and Darren Pescod, managing director at The Mortgage Broker Ltd, admitted intermediaries were increasingly frustrated by lenders rejecting applications if the amount of rent was downvalued.
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Pescod said: “If the downvalue in rent is rejected by the lender, you have to go through placing the case again. If the underwriter has a percentage discretion on the rental amount, e.g. 10 per cent, then if the valuation is a bit off then it still fits.”
He admitted this type of product wouldn’t work if the rental cover was 130 per cent but no lender currently allowed for this and it would be a positive addition for many brokers.
David Connelly, head of products at Advantage, said it was moving into the BTL market soon and this could be an option to consider.
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“We are moving into the BTL market very shortly so it will be something to consider going forward. We will park it for the minute and see how our initial launch goes. I think much will depend on how much ability there is to be flexible and what the underlying product is. However, if the decision is marginal, it would be a good way to go as it’s all about making the process as slick as possible for all concerned.”
However, Matt Grayson, head of PR at BM Solutions, admitted he couldn’t see it happening in the short-term.
“As a lender it would make me very popular if I said we want to be as flexible as possible but there has to be the consideration of lending responsible. While the vast majority of valuations are fine, often there is a reason if it is downvalued. However, we have an appeals process which you can go through and if you can prove information on comparable properties then we will try and be flexible.”
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