We spoke to a customer earlier this year, unfortunately at the time we were fully booked and advised it would be around 2 weeks before we could look at it. The customer understandably in the meantime decided to speak to another broker who had been recommended to her by a work colleague.
Once we had caught up with everything we called the customer to see if they still wanted our help. They told us they had spoken to another Mortgage broker who had come back with some products and what the rates were.
This was a little bit of an unusual one as we usually take the view that we would not step on another brokers toes if the other broker has already started the work. However in this case, because we knew a little about the circumstances already – the key part being that they were buying the property off a distant relative at a reduced price, we thought it was worth investigating to see if we could find a lender who would be happy to use the discount either as the deposit or at least towards it. The original broker did not really do anything wrong as such, but they took the obvious route to place the case rather than putting in a little extra work to try and save the customer money. Going straight for the 90-95% products is what we would expect an individual to do, not an experience broker.
What we did
First thing we did was to get a family tree diagram to work out how they were related. The family link was very tenuous and involved “once removed” when looking at it on a family tree flow chart.
We spoke to around 10 lenders and they were all saying that the family link was not strong enough to be used, another lender said they could potentially do it but they would want birth, death and marriage certificates in order to verify the link. That is a little bit awkward to ask for, especially when it involves a relative who has recently passed away.
After a number of calls and emails we eventually managed to find a mortgage lender who were prepared to consider the application with a little less evidence to prove the family link.
This meant that instead of applying for a 90% LTV or 95% LTV mortgage with rates of around 3.5% to 4.5% with the other broker, we were able to secure them a mortgage on a 75% LTV product, we ended up applying for a rate of 1.5%. Not only this but the product had £500 cashback and a free valuation.
We were not trying to beat the other broker, we would very rarely take on a case that another broker has started to work on and if they had taken the same approach we had and we could see they were on the right track or if we had been unable to secure a product so much cheaper we would have backed away and left it with the other broker but we took the view that it would not have been fair on the customer to do that.
In this case by taking a bit of time to ask the question rather than assume it could not be done, we managed to secure an interest rate less than half what they would have obtained elsewhere. We were able to save the customer around £2-3,000 over the course of the 2 year deal when you consider the fees and cashback and difference in monthly repayments.