Every now and again I speak to people who say “this will be one of the most complicated cases you have had”. It always makes me smile as generally those applications are what we consider normal. They may be complex but we are used to complex.
I thought it might be worth telling you about our most complicated success stories. One that was very close to not making it into the success stories!
This application was referred to us by another broker we know. They had given the case a try themselves but struggled. They passed it over to us to see if we could help.
What made it so difficult?
I am really not sure where to begin… Usually when we look at complex cases, it is maybe adverse credit, a quirky income or an unusual property. This had (no pun intended) the full house!
Income – The clients income was made up from various businesses. Some of which traded between themselves and their incomes were up and down. 4-5 businesses with profits up and down. Nothing at all suspicious it was just that Business 1 might take on a client and outsource some jobs to one of the other businesses. So that was fun and difficult to overcome.
The property – The client had taken out a bridging loan, oh yes we forgot to mention that! Which then meant time was also of the essence just to add to the fun. The bridging loan was taken to purchase the property with top ups taken to renovate the property. However the property had its water supplied by a borehole. A borehole is in essence a Well and in 13 years something we had not come across before. We learnt that not a lot of lenders like boreholes!
Adverse – to be fair, this was actually the easiest part to overcome. There were a few late payments scattered around but not due to anything other than poor management due to running a few businesses, renovating a house and bringing up a family.
It was not looking good
OK so spoiler alert, this is in success stories for a reason. But it was far from straight forward.
After looking at the application I ran it by a few of our account managers and I got some positive news from one of the lenders. I gave them a call discussed it all in more detail and everything was still looking good. I ran the deal by the client and he was happy.
The application went in, the next day we heard from the underwriter – Declined! He had not even finished reviewing it all but he was not happy to put his name against a mortgage offer. Difficult to argue but frustrating after getting the green light from one of the underwriters colleagues.
Next we started to another lender. It became apparent during the application process they were never going to accept it due to the questions they were asking about the income and what they would accept. No application made but only thanks to the wording of the application form. Again, our account manager was telling me it looked good.
By this point I was thinking we might struggle with this. I had a chat with the customer and we had a brainwave between us… Lets package the application differently. By this we meant lets apply for the absolute minimum we needed in order to get the bridging loan paid off. That takes the urgency away, gets him on to a lower interest rate and then we apply for the extra in the form of a secured loan down the road.
All sounded good to us! We submitted a DIP which referred and was then reviewed by an underwriter – Decline!
This was not going well and I was thinking I was going to have to give the client the bad news.
Until…
However, we then went back to a lender who had previously said no. But with the case packaged in this new format. They were not exactly overwhelmed by the case to put it mildly. We spent nearly 3 weeks going back and forth obtaining documents and information, re-jigging the figures to get the underwriter more comfortable with the application. I have to be honest, I did not have much hope.
The client was getting a bit frustrated and was thinking we were doing all of this only to end up in the same place but having lost 3 weeks. It was difficult to think otherwise, I thought the same!
And then out of nowhere sprung the mortgage offer!
Summary
When we get complex cases I always put a list of the pros and cons and look at it as if I were an underwriter. I try to put a case together to get an underwriter onboard.
I did not think the case was a bad one. The income was there, the late payments were explainable and the LTV was there also. But I dont think those things were enough to say THIS is the reason you should be doing the case.
This is the first time I have had to make 3-4 applications to get a mortgage offer. The client was quite flexible which helped massively (although in fairness it probably also caused a lot of the problems in the first place). Ultimately it was a case of selling up a home he had spent a year renovating or making sacrifices but he knew his options were limited and so he worked with us to get it over the line.
Overall it took around 8 weeks from speaking to the client to getting a mortgage offer.
It took 3-4 application and MANY phone calls.
But we did eventually get there.
I dont think I will ever come across an application this complex again (I certainly hope not haha).It was something very different to get our teeth into.