Client requirements

First-time buyer residential mortgage.

Challenges

The clients were a couple, of which one was employed and one self-employed, and both first-time buyers. The self-employed client only had one year’s worth of figures, which weren’t formatted into traditional accounts. The mortgage needed to be a 95% loan-to-value and to add a further complication mortgage-wise, the clients were using a gifted deposit. The mortgage had to be offered and the property completed within very tight timescales too – one month from the initial enquiry.

Solution

Hawke FS initially took a step back and put the self-employed client in touch with an accountant, who reviewed their income and standardised their accounts. This, combined with the explanation Hawke put together for the lender, confirming employment history, gave assurance of the client’s continuity in the industry. As although the client had only been self-employed for one year they had consistently and successfully worked in the same industry for many years. Hawke supported the clients the whole way through the process, including in relation to the solicitors, the estate agent of the property they were purchasing, the surveyors and, of course, the lenders. This ensured the property could complete within the timescale.

Client requirements

First time buyer using Help to Buy for a new-build purchase.

Challenges

The clients had previously been unable to obtain them a decision in principle at the loan-to-value required to fund a property satisfactory for their family needs. This particular client had a Debt Management Plan which meant they did not reach the lender’s internal credit scoring. An additional complication was that the property address of the new build was odd. It’s imperative to ensure that all documents are absolutely correct for both the HTB application and in obtaining the Authority to Proceed. Failure to do can cause problems with the solicitor further down the application process.

Solution

To overcome the obstacle caused by the Debt Management Plan, Hawke recommended purchasing via HTB, based on the client’s incomes being progressive. This overcame the higher loan to values negating the client’s inability to meet the lender’s credit score. The clients had no idea this was a viable option before Hawke presented it to them and Hawke ensured they remained comfortable and that they fully understood each step of the process.

The issue with the address of the property meant that Hawke had to obtain a Reservation Agreement and a Council of Mortgage Lenders’ Disclosure Agreement. Hawke challenged the developer and the estate agent as far as obtaining a copy of the Street Naming and Numbering Notification which scheduled the allocated addresses. Not only did ensuring all details and paperwork was absolutely correct in turn ensure there were no issues further down the line, but this also provided an added convenience to the client for when they moved in and had to set up their utilities.

Client requirements

We have recently completed on a first purchase using the Help to Buy (HTB) scheme, prior to changes effective 15/12/2020, for a couple who were introduced by a friend who was an existing customer.

Challenges

Where the conversations around their objectives started amidst the birth of the pandemic, it was an interesting meeting whereby they were one of the first online video meetings we conducted, showing how our business like many others, has had to adapt as a result of Covid. Examples for ourselves include normalising online video meetings via Zoom/Google Meets, enlisting ‘Castlight’ as a means of electronic, remote ID verification and providing additional support in the form of 24/7 mobile access to your broker.

These particular customers were aware of the numerous schemes and plans available to them as first time buyers. We discussed the pros and cons for each, determining the most suitable option based on their own deposit and career paths for example, finalising the decision to Help to Buy England were:

1. Their income and career path is young, with the expectation to increase, warranting options at the time that the equity loan would become interest bearing.
2. We could tailor variables with the mortgage such as the term, to ensure they were getting the most effective, relevant and beneficial mortgage structure to repay the equity loan or sell and move on after their initial mortgage.

“[The broker] was most helpful throughout the whole process for assessing out income and affordability all the way through to receiving our HTB mortgage offer”.

Solution

It is important to ensure the customer is confident in everything we discuss and so we provided the Help to Buy eligibility calculator, confirming eligibility for the Authority to Proceed and subsequently, the equity loan. We also provided mortgage illustrations relevant to the enquiry at the time of discussion so that they had absolute clarity on their potential future position at outset and utmost confidence in approaching any estate agent/developer to make offers.

The time came where a property had been found in the Summer of 2020. After much updated discussions and where by now, almost 50% of mortgage products had been withdrawn from the market, lender availability had dropped drastically, and rates had changed since originally quoted in February.

As always, the customers objectives and intentions were at the forefront of our minds. In this case, the purchase was a 5 year project with a view to move on after this period. With flats being the order of the day for the purchase and where the prospective home was in the vicinity of commercial units, coupled with a new build warranty that few lenders were accepting, the responsibility of our advice turned to determining whether this was the right property to invest in.

These questions arose and we had conversations considering that generally, first time buyers are those that would be most likely to be buying their flat in 5 years time, when they would be looking to sell. If they (potential future buyers) have similar limitations to their mortgage options, this could potentially affect the resaleability of this particular flat, making it harder to sell when the time comes.

“A broker completely removes the stress of dealing with the banks and lenders. Having someone to fight your corner and get the best offers is also a great bonus”.

These customers decided against this specific flat and instead found another, more fitting property which they have now completed on. We overcame the issues of furlough, starting a new employed role and got both the mortgage offer and Authority to Proceed submitted and applied for in line with the demands of the agent/developer.

A comment from the customer: “My experience with Hawke was excellent from start to finish. Adam Hollidge in particular was patient, determined and extremely knowledgeable when it came to sourcing our mortgage”.