99% of brokers believe the most important attribute of a specialist mortgage lender is the willingness to ‘take a view’

30 November 2022

Most mortgage intermediaries say they could live without time-saving tech as long as the lender was willing to take a view on applications and gave them the confidence that their cases would complete.

Over 100 mortgage intermediaries were interviewed and polled for United Trust Bank’s mortgage white paper - ‘Growing opportunities for brokers in the specialist mortgage market’ – and they were asked to rank the importance of specialist mortgage lender attributes and service features from ‘not important’ to ‘vital’.

The researchers found that compared to knowledgeable staff, flexible criteria, confidence in the case completing and the all-important ability and willingness to take a view on more complex and marginal cases, fintech features such as e-signing and remote ID verification were a nice to have rather than a must have for a majority of brokers.

Other factors more likely to attract brokers to use certain lenders were access to underwriters, flexible criteria and quick decisions.

Q - How important are the following features of specialist lenders:

UTB’s white paper confirmed the key factors differentiating ‘mainstream’ from ‘specialist’ cases are around income, credit history, credit score, loan size and property type. However, 52% of the 100+ brokers who took part in the research believe that affordability is a bigger challenge for specialist cases compared to mainstream. 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 specialist mortgage lenders they had placed cases with in the previous 12 months. The responses indicated that the top five lenders used ‘a few times’ to ‘a lot’ were:

• Joint 1st – Together and United Trust Bank
• Joint 3rd – Pepper Mortgages and Precise Mortgages
• 5th – Kensington Mortgages

Although other lenders including Aldermore, Kent Reliance, Foundation and The Mortgage Lender appeared in the list of lenders used, these tended to have been used by brokers ‘once or twice’ rather than more regularly.

Buster Tolfree, Director of Mortgages - United Trust Bank, who commissioned the white paper, commented: “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.

“Auto-underwriting is getting smarter, and lenders are increasingly employing clever fintech for other processes too such as secure document transfers and messaging, remote ID verification and e-signatures. Although brokers are rightly focused on placing difficult cases, the benefits technology can deliver in terms of speed of application, security and, eventually, the cost of specialist lending should not be overlooked and are well worth pursuing.

“It’s great to see that in a very short time UTB has become one of the regular go-to specialist mortgage lenders alongside the likes of Pepper Money and Together. Our pragmatic, flexible underwriting, class leading technology and commitment to delivering quick and reliable mortgage offers has proved to be a popular combination with mortgage intermediaries and we will continue to develop products and services which enhance the specialist mortgage sector and deliver more successful outcomes for brokers and their customers.”

UTB’s white paper examines the market as it stands currently, how it has evolved and matured over the last 10 years and the opportunities it presents brokers now and in the future. The report uses a combination of quantitative data from a wide pool of mortgage brokers, further insight gained from in-depth interviews and commentary from several of the industry’s leading brokers, network, clubs and distributors, including Brightstar’s Rob Jupp, Connect for Intermediaries’ Jane Benjamin, Dale Jannels from Impact, Matthew Arena from Brilliant Solutions and Danny Belton of L&G Mortgage Club.

United Trust Bank’s white paper - ‘Growing opportunities for brokers in the specialist mortgage market’ – can be downloaded for free here - https://www.utbank.co.uk/specialist-mortgage-market-2022/

And brokers can register to use UTB’s services at www.utbankmortgages.co.uk