A Simpler, More Integrated Approach to Mortgages
Most lenders offer standard mortgages, but how many borrowers these days actually fit the limited criteria to qualify for ‘standard’? Certainly fewer than ever before, if we’re talking about first-time buyers.
A generation ago, homebuyers typically only took out a mortgage with their spouse or partner, whilst first-time buyers were largely younger couples or single professionals, both of whom would move up the property ladder as their careers progressed and families grew.
The situation is different now. Spiralling house prices, stricter affordability tests and a cost-of-living crisis, have together resulted in buyers looking at increasingly creative solutions to get on or move up the housing ladder. Because many of them simply need more than the very basic criteria that tends to qualify for ‘standard’.
Of course, we’re not talking about truly non-standard requirements, like a specialist product for individuals with credit issues or complex incomes. There are specific solutions that are designed to meet those needs, such as our own Credit Flex and Income Flex products.
But when you think about it, there are certain common circumstances these days that are far more ‘standard’ than they were for previous generations. Which begs the question: wouldn’t it just be a lot simpler if those needs were wrapped up into a new, more integrated standard?
Hinckley & Rugby’s new ‘standard’ is called Core. We named the product range Core because rather than comprising only a limited range of criteria into which a client must fit, the products offer a broader set of flexible core criteria that fit a much wider range of clients.
For example, Joint Borrower Sole Proprietor (JBSP) has evolved in recent years. It is no longer mainly just used by parents to help their children onto the housing ladder – it has become much more multi-generational.
Getting a mortgage may involve pooling resources with wider family members, friends or business partners, or even just between friends. In fact, we are seeing an increasing number of mortgage applications from friends looking to buy a property together: pooling resources to escape the rental trap and start building equity. In addition, we are seeing these mortgages used by middle-aged professionals to support parents looking to remortgage, and siblings buying a property together.
JBSP can also be a useful mortgage tool for couples following a divorce, where one party, who may no longer live in the family home, continues to be a named borrower on the mortgage to help with affordability calculations. This can avoid the upheaval of downsizing into a smaller property, which may be a key consideration, particularly if children are involved.
That’s why we have included our ultra-flexible JBSP features in our Core mortgage criteria, satisfying the needs of a broad range of clients who would otherwise need to access standalone specialist products.
Going back to people supporting parents who are looking to remortgage, we have also included our Tailored Term option in our Core range. This innovative feature allows multiple applicants to share mortgage costs over different time frames – ideal when there is a significant age gap. This enables brokers to tailor products to the needs of their clients, regardless of whether it’s the parents or the grown-up children who are the joint borrowers, or where there is simply a large age gap in a relationship or in a JBSP application.
By considering employed income to age 75 and other forms of income to age 85, and with the term for the oldest applicant being considered separately, a couple starting out together late in life aged, say, 60 and 68 respectively, could have a Core mortgage on respective terms of 25 and 17 years.
Bringing JBSP into our Core mortgage range and offering a Tailored Term as standard, is designed to simplify things for brokers. It creates a more streamlined process for brokers to match borrowers with the right solutions, whether they are first-time buyers seeking additional help to get on the housing ladder, or borrowers who need a more innovative and flexible solution to lending.
Hinkley & Rugby has been helping would-be buyers get the keys to their dream home for 160 years. Evolving our Core mortgage range will ensure we continue to offer dynamic yet simplified lending solutions for the next generation of homebuyers.
Flexible criteria to help your clients with complex cases maximise their borrowing potential Visit https://intermediaries.hrbs.co.uk/