How many times have you been in the position of buying something or doing a deal that doesn’t actually turn out to be the way you thought it was going to be? Sometimes this is because the marketing has overblown the product, other times there is a mis-match in communication between what you think you’re buying and what the supplier thinks they are selling.
Fundamentally, many of the issues that we face, across the mortgage and bridging industry, and more widely in business, are down to bad communication. How many times does a broker find a headline rate, but struggles to find the criteria to know if it applies to their client, or indeed know whether a lender lives up to the service claims that it makes?
Lenders have a responsibility to be as clear and as truthful as they can be about what they offer, their specialisms and their service offering, so that a broker knows whether a certain lender is right for their client. This is especially the case in the bridging market where few lenders appear on sourcing systems and even if they do, the sourcing system is so absolute that it often doesn’t reflect the deals that a bridging lender will actually do, just their main parameters.
There is a significant variance between what different lenders do; those with the lowest rates tend to be the least flexible on the cases they will accept. Other lenders will look at every case on its own merits, regardless of published LTV or loan size limits and will lend on any property as long as the business case stacks up.
It is therefore up to lenders to educate brokers and make their information as freely available as possible. However, it is not a one-way street. Brokers also have a part to play. A key role for a broker is making sure a lender knows exactly what it is the borrower wants at the outset and receives all relevant information regarding the requested loan.
Questioning a client to make sure you have all the information a lender might need to assess an application – and ensuring that it has been completed correctly will play a huge role in getting a loan through quickly. If something is not disclosed then it jeopardises the deal. It is also frustrating to get part way through a loan application process and have to start all over again, because a crucial bit of information is inaccurate, or missing.
Collaboration is key. Closer working between lenders and brokers can help lenders tailor their offering to what brokers and their clients really need. Most brokers value access to key decision makers and underwriters so that they can talk about what is going on. If that is important to you, then you need to work with a lender who operates like this as standard, so that you can both share information.
One other area where brokers can play a key role is with regard to the borrower’s exit route. If the borrower plans to remortgage onto a long-term mortgage after perhaps refurbishing or converting a building, then both the lender and the broker need to carry out due diligence to ensure that the planned finance is a realistic proposition and there are the mortgages out there for the client to refinance on to. This may well come down to criteria once again and brokers can play a vital role, not only in finding their client their next mortgage but making their client aware of the conditions that the long-term lender will want from them.
If at the end of the bridging term the borrower then cannot achieve a remortgage, the broker has a valuable role to play in advising the client that it might be time to sell instead. Once again it all comes down to clear communication, education, of the client in these circumstances, and collaboration between all parties.
Finally, it is very hard to measure service and there are, of course, no league tables for who has completed a bridging loan in the time they said they would, who gave direct access to decision makers or who just helped make it easier for the broker. If a broker has used a lender and things have gone really well for him and his client, communicating this to other brokers helps ensure that other people also have a positive experience.
If things haven’t gone so well, communicating it with the lender so that they can learn for the future is key. Everybody can continue to improve and open communication helps to achieve this for the benefit of everyone.