The Intermediary – June 2025 - Flipbook - Page 54
SPECIALIST FINANCE
Opinion
Simple questions,
complex answers
LUKE WILLIAMS
is specialist property adviser
at Pure Property Finance
More brokers are relying on specialist partners to help make sense of a complex market
W
ith terms
including
the word
‘mortgages’
generating
more than halfa-million Google searches a month
in the UK alone, many prospective
homeowners are still confused about
how mortgages work, what they’re
eligible for, and how to navigate a
challenging market.
Typically, a lot of lenders will let a
buyer borrow around four to 4.5-times
their annual income. It’s important
to reiterate in initial meetings and
calls that any debts, or having a credit
score that isn’t as good as it should
be, could mean that a customer will
have to borrow a lile less, or pay a
lile more in fees. We are seeing that
more products are becoming available
for 95% and even up to 100% loan-tovalue (LTV), which is a huge boost for
market confidence.
This will especially help first-time
buyers get onto the property market,
but it’s important to remind customers
that even though this could be an
option, any funds that they can put
down towards a deposit will hugely
help them in the long run.
For more specialist products,
such as second charges and bridging
finance, it’s very much more scenario
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The Intermediary | June 2025
specific. It’s always best to discuss
with a specialist partner how to find
the most appropriate solution for
your customer.
Mortgage rates
and availability
There’s definitely some optimism
that rates might soen a lile bit
throughout the year, but it won’t be a
dramatic drop. With inflation starting
to ease ever so slightly, lenders are
still pricing conservatively and are
reluctant to make any huge changes.
The Bank of England base rate
is a key driver in interest rates.
We’ve started to see this come down
consistently, with two members of the
Monetary Policy Commiee (MPC)
most recently voting for a 0.5% cut.
Mortgages may follow in the coming
months, but they won’t reach prepandemic levels for a long time as
banks are easing themselves back in at
a slow rate.
Lenders use swap rates as a
foundational element in pricing fixedrate mortgage products. Swap rates
are also improving, which allows for
reduced fixed rate pricing, and also
helps with customer affordability.
Geing a mortgage starts with
preparation. A lot of customers
– especially first-time buyers or
someone that’s not bought a house in
the past 20 years, will be confused by
the process and may need additional
handholding from a broker or
specialist adviser, especially if it’s a
new type of mortgage they’ve not had
to deal with before.
If someone’s income is a bit more
complex, whether they’re selfemployed or have multiple different
income streams, then you need to
advise your client that this could be a
bit more complex than your typical
mortgage and talk them through the
process from the start.
With the property investment
landscape ever changing, more
brokers are relying on specialist
partners to assist with acquisitions
that need to complete quickly,
utilising bridging finance for speed,
or to allow for refurbishments before
clients move in or let out.
Sometimes bridging loans are seen
as a last resort, but in some instances
this shouldn’t be the case, especially to
speed things up for a client.
Credit challenges
It’s not impossible to get a mortgage
with bad credit, although you may
wish to seek help from a specialist
mortgage adviser or broker in geing
your client the best rate.
It’s definitely easier for a borrower
to get a mortgage that they desire, with
beer fees, if their credit score is good,
but specialist lenders offer mortgages
to those with poor credit or who’ve
previously missed any payments.
A major downside is that the rates
can be higher than a normal mortgage
and the deposit needs to be larger
than 10%.
A good broker will help borrowers
find the right specialist lender, and
might advise them on whether it
would be worth building their credit
score up beforehand. ●
