This year has been a time of unparalleled difficulty for many. After the loneliness and disruption of lockdown restrictions, the economic shockwaves are beginning to ripple around the country.
In August, the country formally entered its first recession in 11 years. With redundancies looking to rise as the furlough scheme winds down, it’s hardly surprising that some brokers are beginning to get anxious about what the future holds in this period of Advising through uncertainty.
In a recent Growth Series podcast, Sally Laker, Managing Director of Mortgage Intelligence, said that brokers have been “the heroes of the crisis” from within the mortgage industry, especially during these times of Advising through uncertainty. At a time when lenders were inundated with mortgage holiday requests, brokers adapted rapidly to deliver their service online and over the phone, providing essential Advice through uncertainty.
Many went above and beyond their duty to reassure their customers when it sometimes felt like all was sliding into chaos, even when face-to-face contact was impossible. This dedication to Advising through uncertainty was truly remarkable.
Now, lockdown restrictions have been relaxed, and Chancellor Rishi Sunak’s stamp duty holiday has gone some way to reinvigorating the market. However, the message from lenders has been one of caution and restraint, with Nationwide warning of a ‘false dawn’ as prices have begun to recover in this ongoing period of Advising through uncertainty.
So, how can mortgage brokers continue to offer great advice as the financial disruption continues and the housing market slowly resumes during this extended phase of Advising through uncertainty?
Be realistic with your clients
Delivering great mortgage advice means being upfront about threats to getting the desired mortgage. This is crucial, especially when “Advising through uncertainty” is paramount, as is their well-being.
Many lenders now restrict criteria around furloughed income, commissions, and bonuses. They often consider only workers’ reduced salaries instead of their annual income. This can mean delivering hard news, particularly to high earners on furlough and those whose pay relies on bonuses. It’s essential to address these challenges while “Advising through uncertainty.”
You need to deliver this information clearly and concisely. Tell furloughed borrowers they may return to their lender’s standard variable rate while waiting for full pay before remortgaging. They may even need to undertake a product transfer with their current lender. Getting the facts on the table will improve your customers’ chances of making the right choices, especially during uncertain times.
Moreover, be upfront with clients whose income relies on overtime and bonuses. Post-lockdown, there will likely be more restrictions on income multiples and how much a client can borrow. Navigating these changes and “Advising through uncertainty” is crucial.
Advising your customers to prepare for a new mortgage has never been more important. In the new coronavirus reality, planning months for any house move or capital raising is wise. Let them know this and emphasise the importance of foresight during these uncertain times.
This clear, insightful information will allow your clients to make well-considered decisions. Effective decision-making is invaluable when “Advising through uncertainty” is key.
We recently interviewed Neil Bage, an expert in decision-making, for our Growth Series podcast. Listen here to learn more about helping your customers make effective decisions in stressful situations while “Advising through uncertainty.”
Keep up to date with the rapidly changing situation
We are in the midst of a rapidly changing mortgage industry. Although lenders have started reinstating higher LTV mortgages, the industry remains different from pre-pandemic times. Additionally, some product withdrawals continue, adding to the challenges of advising through market uncertainty.
Ensure your employees stay updated on the latest mortgage changes. Understanding these changes is crucial for advising customers seeking new mortgages or renewing existing ones. This knowledge is especially important in this era of uncertainty.
Lenders are reassessing cases, particularly for self-employed and furloughed borrowers. Many lenders now require letters from employers guaranteeing post-furlough job security. However, many employers are reluctant to provide this documentation, complicating the advising process further.
Stay current so you can promptly advise your customers of such issues. Demonstrating this commitment is essential in the evolving mortgage landscape. By doing so, you showcase your dedication to advising through uncertainty.
Ask the right questions from your clients, and don’t be led by them
Your detailed knowledge of the mortgage market is invaluable in times of uncertainty. This expertise is known as “Advising through uncertainty.”
The mortgage market remains extremely turbulent. As an adviser, you are better positioned than your customer to navigate these rough waters. Each week seems to bring a new ‘normal’ for mortgage brokers. Product changes and U-turns further complicate an already complex set of circumstances. In this landscape, your expertise is paramount.
Unless your client is an undercover mortgage whizz, you understand better than them the impact of lenders’ conservative approach. This highlights the essence of Advising through uncertainty.
It would be best to delicately ask difficult questions to understand your customers’ situations accurately. Explain to them that you can build a strong case with this information. This helps remove any concerns the lender might have about their application.
The global pandemic’s economic shockwaves continue to affect the market. The key questions you need to ask your clients have changed. The most important question has become: “What sector do you work in?” This is now more important than finding out their annual income. Clients in sectors hit hard by the economic fallout, such as tourism or hospitality, will find it extremely difficult to get a mortgage. Advising through uncertainty in this context means adapting to the changing landscape.
At Accord, we are passionate about helping Expert brokers improve their business performance. This is especially true in times of uncertainty when advising. That’s why we developed the Growth Series, a hub of resources designed to help brokers grow their businesses.
Thank you for reading our publication “Advising Through Uncertainty | Putting Customers First.” Stay “Connect“-ed for more updates soon!
