Mortgage expert Jane King, addressing delegates at the recent Financial Adviser Mortgage Masterclass, accused high street lenders of being too prescriptive and inflexible.
Commenting on large lenders, she said:
“They want you to tick all of their boxes and there is just no flexibility. If you have a client who has something that sits just slightly outside of their criteria, then the answer is just ‘No’.”
According to FTAdviser.com (November 2017), King also criticised lenders for wanting a mountain of paperwork, even though she believes that relatively little is often enough to make a loan application decision.
She admitted that many large lenders charge competitive interest rates, but are only interested in what she called “tick all the boxes” loan applications that they judge to be safe and sensible.
Another delegate at the masterclass, Louisa Sedgwick, said that because of loan losses in the past, many large lenders are too cautious. She believe large lenders need to offer more flexibility and innovation. In large organisations, it can take time to change the financial culture, she added.
There are a number of alternative lenders who deal with complex mortgage applications for both commercial mortgages and individual mortgages. They tend to take more lending risks and can often approve a mortgage application that a large bank turns down.
A good mortgage broker will look at a mortgage application, and if it is complicated, they will approach a smaller lender who is often more likely to approve a loan application than a large high street lender.