"They may require tailored solutions and strategies to meet their specific needs, but also that they have a statistically lower risk career and income trajectory."
In today’s ever-evolving mortgage landscape, new types of borrowers continue to influence the strategies of lenders across both the mainstream and specialist residential markets, particularly when it comes to affordability.
When we think of these borrowers, such as the self-employed, those with complex income streams, and individuals with a less-than-perfect credit history, it’s important to recognise that many of these borrowers meet the definition of ‘professionals’ in their field, meaning that they may require tailored solutions and strategies to meet their specific needs, but also that they have a statistically lower risk career and income trajectory.
Often, these specific needs are best addressed through a manual underwriting process which incorporates a deeper understanding of each applicant's unique financial situation, income streams, and credit history. This approach ensures that mortgage applications are evaluated based on individual merit rather than following a one-size-fits-all model.
As a lender, we understand the importance of offering solutions which resonate with specific borrower demographics. After all, the specialist residential sector is uniquely equipped to assist individuals and households with complex financial situations. With the current economic climate and higher interest rate environment continuing to place sustained pressure on a number of prospective homeowners, the demand for flexible, competitive, and responsible mortgage products is growing.
A growing number of professionals face challenges securing mortgages from high-street lenders, despite thinking they tick many mainstream criteria boxes. This is often due to revenue streams or employment histories which, despite their strong career trajectories, secure futures, and vast earning potential, may be deemed somewhat ‘out of the ordinary’. This means that the specialist residential market is playing an increasingly crucial role in offering solutions for these individuals, ensuring that professionals with less-traditional financial profiles can access the mortgage products they need.
Since we launched our Professionals mortgage range in late 2021, it has become a key component of our residential offering, helping a wide variety of professionals access mortgage finance. Over time, we’ve listened to feedback from brokers and clients, expanding our eligibility criteria to include more professions while maintaining the professional distinction. In some cases, applicants can even secure up to six times their income, and only the primary applicant needs to be a professional as defined by our list.
Included within this offering is an interest-only option which can provide greater flexibility for those clients who may be sitting on high levels of equity or those who need to lower their monthly outgoings in the short-term. Whether it’s paying off higher-interest debt or covering education-related expenses, past or present, this option can prove to make financial sense for some clients in specific situations. However, it’s essential that advisers discuss the pros and cons, including viable repayment strategies, to ensure this solution aligns with the client’s short, medium and long-term financial goals.
As the residential market continues to evolve, the need for expert advice is more critical than ever for a rising number of potential and existing borrowers. By understanding the nuances of specialist residential products, intermediaries can help a wider range of professional clients to navigate the complexities of today’s mortgage landscape from an affordability perspective and in securing the most suitable options for clients whose income patterns or employment histories may not fit traditional lending criteria.
