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Five tips for solving challenging cases

Adrian Moloney | 21.07.2020

There are numerous reasons why a borrower may fall under the “challenging” case category and need the services of a specialist lender. These include:

  • Not meeting the criteria of a mainstream lender
  • Having a less than perfect credit score (defaults, CCJs, late payments, significant debt)
  • Receiving an income from self-employment or multiple different streams (gig economy)
  • Anyone else requiring a more flexible solution (shared ownership, help to buy, high LTVs)

While it’s clear that a one-size-fits-all approach won’t work in these cases, they can be difficult to place and throw up obstacles and challenges that are unpredictable.

However, if you get the planning and presentation right – and take time to seek out the right lender experienced with your situation – you can ensure a painless process for both you and your clients.

Here are some examples of five different types of challenging cases you could face, and how Kent Reliance for Intermediaries could help you solve them.

1. Need for a high LTV

Client profile:

Whether your client is applying for residential mortgage or buy to let mortgages, if they can’t easily prove their ability to repay significant amounts of money each month, they may not be able to get the mortgage amount they want. Some lenders may be particularly cautious about lending large sums at a higher LTV, even on an investment as reliable as a property.

The solution:

While other lenders can often be less flexible on high-value buy to lets, we’re well suited to these hard-to-place cases. We have access to a wide range of products from across the market, and our underwriting team will assess each case individually to find the best solution.

2. Receiving a non-standard income

Complex income case:

There are many professions where evidencing your income can be complicated. If you have clients that are self-employed, 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 athletes – 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.

Even those who work in traditional industries, such as lawyers and tradesmen, can still have inconsistencies in their income, and may find it difficult to secure a mortgage.

The solution:

Specialist mortgage providers like us offer tailored loan solutions that give flexibility to clients with unique needs. We’re experienced with self-employed and contractor clients and have a range of products with more flexible criteria.

3. Less than perfect credit history

The client:

This is one of the most common problems faced by clients. From CCJs or missed/late payments through to large debt or bankruptcy, if your clients have had any issues with credit (or indeed no credit history at all), lenders may be reluctant to offer them a mortgage. Or they’ll be looking at much more unfavourable terms to compensate for the risk.

Financial matters can be awkward to discuss, and approaching the subject with your clients can be difficult. Many brokers may avoid specialist cases as they’re too complicated, or they can’t find a lender experienced with the situation.

The solution:

The best place to start is by explaining to them the need for transparency. By addressing problems early on, you can avoid any nasty supposes later down the line.

Some providers have a blanket “computer says no” approach and dismiss such applications out of hand. Fortunately, Kent Reliance for Intermediaries is far more understanding when it comes to credit issues like this, and we have the criteria and products to support such cases. Plus, we take an individual view on a customer’s credit profile, helping us understand the client’s needs in greater depth.

4. Different property types

Property profile:

Your client may be looking at “complex properties” other than your 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 has low-yielding rents?

The solution:

Our expert real estate team are based in-house and they use their extensive market knowledge to consider each case on their individual merits in order 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

We also offer income-backed options for buy to let clients who have a strong income/employment history but the property may have low-yielding rent.

5. Unique ownership structures

The case:

Your client may not be a “straightforward” buyer; they could be purchasing for the first time, or be part of a newly formed limited company.

What if they’re an expat client with employment history based outside of the UK? Or what if they’re struggling to get hold of a deposit for a mortgage?

Not every lender offers shared ownership mortgages or accepts 0% deposits. And not every lender would be willing to take on complex ownership situations.

The solution:

Our flexible criteria allows for first-time buyers, limited company structures (including newly formed companies) and LLPs. We also have a range of shared ownership products for those that may struggle to raise enough money for a deposit, and we’re one of only a few lenders that offer 0% deposit.

On top of this, we have the appetite for expat lending and can work with your client to ensure they have the correct documentation.

Speak to us today

We’re always interested in ways we can support your complex cases. 

No two are the same, so please don’t hesitate to get in touch if you’re currently (or about to) tackle a troublesome application.

Talk to your local business development manager and broker liaison buddy today for further support.

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