Mortgage cases are becoming harder to categorise as borrowers’ incomes, property ambitions and personal circumstances become increasingly varied, according to Saffron for Intermediaries.
Contractors, company directors and borrowers with multiple income streams do not always fit neatly into conventional affordability models, while expat clients, visa holders and less conventional properties can introduce additional complexity. But complexity does not necessarily mean a case is unplaceable.
Saffron’s BDM team has identified five areas where an early conversation with a lender and a closer look at the individual circumstances could make the difference in finding a workable route towards findings the right lender and mortgage option.
1. Complex income does not necessarily mean weaker affordability
The way people earn is becoming increasingly difficult to capture through a single salary figure. Contractors, company directors, CIS workers and self-employed applicants may all have earnings that require a different approach to assessment, while some borrowers now have several sources of income. The key question for brokers is how a lender will assess an income type and what evidence it will require.
Leanne Turner from Saffron’s BDM team said: “Two clients earning the same amount on paper can have very different circumstances, so understanding how that income is generated and how sustainable it is really matters. Complex income does not automatically make somebody a more difficult borrower. Sometimes the challenge is simply finding the right way to evidence what they actually earn.”
Saffron can consider self-employed applicants, company directors, contractors, CIS workers and professionals, including borrowers with multiple income streams. Depending on the circumstances, this can include self-employed applicants with one year’s accounts, contractors and CIS applicants assessed on an employed basis, and company directors assessed using salary plus profit after tax.
2. An income multiple does not always tell the full affordability story
Loan-to-income ratios provide a straightforward way of assessing borrowing levels, but they do not necessarily capture the full financial circumstances of every client. That can become particularly relevant for higher earners whose borrowing requirement sits above conventional multiples but whose income and expenditure could still support the loan.
Alice Waites from Saffron’s BDM team said: “A loan-to-income figure is useful, but it is only one part of the affordability picture. For some higher-earning clients, a hard ceiling can stop a case before their actual disposable income, expenditure and wider circumstances have really been considered. Ultimately, it’s important to consider affordability without loan to income multiple caps, to ensure the most suitable solution can be found.”
For eligible borrowers, Saffron for Intermediaries’ Premier Income proposition has no maximum LTI cap, with affordability instead assessed according to the applicant’s individual circumstances.
3. An unusual property should not automatically mean an unusual risk
A mortgage can fall outside mainstream criteria because of the property just as easily as because of the borrower. Self-build projects, annexes, larger plots, HMOs, listed buildings and some forms of non-standard construction can all require more investigation, but the label attached to a property does not necessarily determine whether it is mortgageable. Factors including condition, intended use, valuation and future marketability can be equally important.
Laura Barrett from Saffron’s BDM team said: “There is a temptation to see an unusual property type and assume it will be difficult to finance, but the detail matters. An annexe, acreage or a different construction method does not tell you everything you need to know about a property. Understanding what the client is buying, how it will be used and how marketable it will remain is much more useful than looking at the label alone.”
Saffron for Intermediaries can consider a range of specialist properties including self-build and custom-build homes, significant refurbishment and knockdown-and-rebuild projects, HMOs, multi-generational properties, homes with annexes, listed buildings and selected non-standard construction.
4. Being a first-time buyer does not necessarily rule out buy-to-let
The traditional journey of buying a home before becoming a landlord is not the only route into property investment. Some prospective landlords may choose to invest before purchasing their own home, while others increasingly use limited company structures when building a portfolio.
For brokers, that means assumptions based on the traditional landlord profile can risk closing down options too early.
Leanna King from Saffron’s BDM team said: “Not every landlord starts in the same place anymore. We increasingly have conversations about people entering property investment through a route that might once have been considered unusual. The important thing is to understand the client’s circumstances, experience and plans rather than assuming that not already owning a home automatically closes the door.”
Saffron can consider first-time buyers entering the buy-to-let market, as well as landlords purchasing in their personal name or through a limited company.
5. International circumstances are becoming part of everyday mortgage advice
International careers and workforces mean brokers are increasingly likely to encounter clients whose circumstances cross borders. That can include British expats looking to purchase or refinance UK property, as well as foreign nationals living and working in the UK on visas.
These cases may require additional checks, but an international element should not in itself be viewed as an automatic barrier to borrowing.
Alice Waites added: “People’s careers and family lives are much more international than they once were, and mortgage advice increasingly has to reflect that. The important thing for brokers is to establish the detail early; where somebody is based, their residency status, how they earn and what they are trying to achieve. Once you understand those points, what initially looks like a complicated case can often become much easier to assess.”
Saffron offers residential and buy-to-let solutions for expats across a wide range of countries, subject to lending policy, and can consider applicants on a range of suitable visa types. For eligible visa applicants, there is no minimum remaining visa term requirement.
Lee Williams, National Sales Manager at Saffron for Intermediaries, said: “The mortgage market has spent years talking about ‘complex borrowers’, but in reality many of the circumstances that sit behind that label are becoming increasingly normal.
“People have more varied careers, different sources of income, international lives and ambitions for properties that do not always look like the traditional home. Brokers are having to deal with that reality every day.
“That makes the conversation between broker and lender more important than ever. Ensuring that all of the information about the client’s case has been thoroughly collected, will help the adviser to apply different lenses to their circumstances to understand what the best outcome could be for their personal circumstances.”
