Insight and events

Adrian Moloney, Group Sales Director, Kent Reliance for Intermediaries

There are numerous reasons why a client’s situation might not be straightforward. But ultimately, they all have the same goal – to secure the mortgage they need.

As specialist lenders, we all understand that there are numerous reasons why a customer’s situation might not be straightforward and it’s not always due to a deposit shortfall or a credit blip. Sometimes these cases require a conversation to dig a little deeper into the detail and working alongside a lender experienced in the following types of scenarios could make all the difference:

1. Your client has a non-standard income

There are many professions where evidencing income can be complicated. If you have clients that are self-employed or work on a contract basis, are sole traders, or have an inconsistent income, they could face problems when applying for a mortgage with mainstream providers.

Individuals with ‘unconventional’ professions such as actors, musicians and sportspersons, may find it hard to evidence the level and consistency of their income, even if they have significant accumulated wealth and reliable sources of cash flow.

And, even those who work in traditional industries, such as lawyers and tradesmen, can have inconsistencies in their income.

Solution:

Some specialist mortgage providers offer tailored solutions that can give the flexibility to clients with unique needs. For example, Kent Reliance for Intermediaries (KRFI) can accept  applications from self-employed clients with a minimum of one year’s accounts. Not only that but we can work on a projection for year two based on an uplift of up to 30% of the first year’s figures.

We’re also able to consider 100% of secondary income in many scenarios and can accept multi-source income from employment, self-employment, or a combination of both.

2. Your client needs a high loan amount with a high LTV

For certain clients, the loan amount they need may tip the million-pound mark. This could also be paired with a high LTV if their deposit is on the lower side. Say it’s someone who’s relocating to a more expensive area or looking to buy a second home, they could experience difficulties achieving their lending goals if their need for a high loan value is paired with an LTV above 80%.  

Solution:

In cases like these, it may benefit the applicant to have an underwriter take an individual view of their situation. It may also require a conversation between the BDM and the broker to pull all the case details together. For example, at KRFI we can consider up to 95% LTV on a £1.5m loan size as standard for our income flexibility range. But say the applicant needs £1.6m at 90% LTV; at first glance it doesn’t look like it’d fit standard criteria but we may still be able to accept it if we’re able to discuss the case in finer detail.  

3. Your client is trying to get a mortgage on a ‘complex’ property type

For a landlord client, they may be looking at ‘complex properties’ other than a standard buy to let. These could include HMOs, multi-unit freeholds, ex-local authority properties or those above commercial premises.

Alternatively, what if the property your customer is looking to buy, was attached to a commercial premises? Or it was debatable as to whether the property was in a habitable condition?

Solution:

At Kent Reliance for Intermediaries, we have extensive market knowledge to consider each property individually to make informed decisions. Property types we can accept include:

• Certain properties attached to commercial premises (with exceptions)
• Non-traditional forms of construction
• Ex-local authority properties
• High-rise properties
• Basement flats
• HMOs
• Student lets
• Multi-lets, freehold blocks, and multiple houses on a single freehold title

So, it’s always worth getting in touch with our sales team to discuss your client’s property type up front.

4. Your client has a unique ownership structure

Sometimes clients may not be a ‘straightforward’ buyer; they could be purchasing their first buy to let or be part of a newly formed limited company. Or what if they’re a first-time landlord who wants to purchase an HMO as their first buy to let property? Or an experienced landlord who wants to transfer a portfolio from personal ownership to a limited company?

Not every lender would be comfortable with taking on a complex ownership situation. Especially if there’s limited experience to back up their application.

Solution:

Did you know that at KRFI, our flexible criteria allows for first-time landlords, limited companies and even newly formed SPVs and LLPs. We accept intercompany loans, shareholder deposits and director loans as deposits too. And not only that but for first-time landlords, we’ll accept applications for HMO properties up to six lettable rooms. It may also be that your client wants to transfer their portfolio from personal ownership into limited company. These are all things our sales team are well equipped to discuss. 

5. Your client is a first-time buyer, struggling to save a deposit

Saving a deposit can be really hard, especially in today’s market where the cost of living is high. But that doesn’t always stop the need or desire for home ownership. Some people simply require a little bit more support to get onto the housing ladder.

That’s where shared ownership could be an option however, not all lenders offer this as an option.

Solution:

Luckily at KRFI, our teams have plenty of experience in dealing with cases just like this. Our shared ownership offering can accept 0% deposits on part-buy and part-rent mortgages, with us accepting up to 100% mortgage share value.

We also offer 100% staircasing, which provides better flexibility and opportunities for buyers looking to purchase more shares in their properties, and that’s why we’ll only consider properties with housing associations that permit this.

No client is the same, so we’re always happy to have a conversation if your case is proving tricky and could benefit from our individual case assessment. So, let’s talk.

FOR INTERMEDIARIES ONLY.

¹ https://www.hamptons.co.uk/articles/market-milestone-first-time-buyers#/