Saffron for Intermediaries is urging brokers not to write off complex income cases, as changing employment patterns and household finances drive growing numbers of borrowers towards self-employment, contracting and multiple income streams.
This is changing the profile of the borrowers brokers see every day. Yet too often, the assumption remains that anything outside a straightforward employed, salaried profile will be difficult or impossible to place.
To address these assumptions, Saffron has highlighted five persistent myths about placing complex income cases in today’s mortgage market:
Self-employed borrowers always need two perfect years of accounts
Complex or unconventional accounts do not automatically mean a higher-risk case. They may simply require closer scrutiny. Self-employed income rarely fits neatly into a standard underwriting template: figures can be affected by the way a business books future revenue, reinvests profit or structures director remuneration, none of which necessarily reflects the underlying financial strength of the business.
Saffron’s underwriters regularly work directly with clients and their accountants to understand how figures have been structured, rather than declining a case based on headline numbers alone. The lender can also consider shorter trading histories where the wider circumstances support the application.
Multiple income means the case will be too slow or will not stack up
Contracting, self-employment and employed income can be combined and assessed under specialist criteria, rather than treated as a barrier in themselves.
Brokers may assume that having multiple income streams automatically adds delay or risk, but with the right documentation, including payslips, contracts, accountant references and bank statements, different sources of income can be verified and considered together. A case-by-case approach to affordability can help brokers place clients who may otherwise be ruled out by a more rigid assessment.
Unconventional assets, such as crypto, will always be declined
Wealth held outside traditional income streams does not necessarily have to be a dead end. As more clients build wealth through investments, cryptocurrency and other non-traditional assets, lenders that only recognise conventional income sources risk overlooking borrowers with a strong overall financial position.
Saffron takes a whole-of-picture view of a client’s financial position and track record, rather than declining purely because an asset falls outside the traditional mould. Its manual underwriting approach allows the wider circumstances of the case to be considered when assessing how assets can support a mortgage.
A long commute or unusual working pattern will sink the affordability assessment
Where a borrower’s circumstances, such as travel expenses or a recently started contract, fall outside standard affordability models, manual underwriting allows the wider context to be considered.
A long commute, a new role or a non-standard working pattern can create challenges within automated affordability assessments, even where income is stable and well evidenced. Considering the full circumstances, rather than a single data point in isolation, can make the difference between a decline and an offer.
Non-standard income calculations and historic credit blips rule a case out
Rigid income-averaging periods and minor, resolved credit issues do not necessarily close the door.
Some lenders apply fixed formulas to variable income, which can understate what a borrower actually earns, while historic credit issues can continue to affect an application even after they have been resolved. Saffron’s manual approach allows income and credit history to be assessed in context, rather than by formula alone, helping provide a more complete picture of the client’s financial position.
Lee Williams, National Sales Manager at Saffron for Intermediaries, said: “Many borrowers now have circumstances that fall outside traditional lending criteria, and the key question is whether a lender is willing and able to understand those circumstances. Complex does not mean impossible. It means the case needs a lender prepared to look beneath the surface.
“Our message to brokers is simple: before assuming a case cannot be placed, come and talk to us. Manual underwriting means we can look at the client’s full picture, rather than focusing only on the boxes that do not get ticked.”
