Is smaller better right now?
Small is often said to be beautiful, and when it comes to trying to get a mortgage, this is proving very much to be the reality of the current situation on the lending front, both locally and nationwide. Source -http://www.guardian.co.uk/money/2012/aug/08/building-society-mortgages-homeownership
Mortgage lending has slowed in general among the main players and there’s news that one of them, Santander is adamant they for one are cutting back on loans going forward.
Not the case
Explains Paul Ainsworth Lord of leading Darwen Estate Agent,”It’s fair to say that usually if one is trying to get a mortgage there’s a tendency to think the big boys are the way to go, as they’ll have more cash available and there is likely to be more of a chance of getting what you need – but, that is not always the case it seems these days – there’s something of a new factor in the mix currently.
I have noticed on my beat, that the smaller building societies, far from sitting it out, are, in fact, getting busier and are up for doing whatever business they can and, also, taking on opportunities the larger lenders just won’t contemplate.”
In the first six months of this year societies and other Mutuals lent £14.1bn worth of mortgages –which was around a 38 per cent increase on the same period in 2011. The number of mortgages approved over that period was up by 45%.
Inthe face of these figures it is the smaller societies who are showing impressive increases in the number of mortgages they are offering and in some instances they are ‘punching above their weight’ n terms of what one might expect them to be doing
Explains Paul, “I think it is generally appreciated that the small building societies cannot compete price-wise. But what they seem to be able to do is make things work for potential buyers who just can’t seem to get their application through a larger society. We find, if we can’t get buyer a mortgage, then sometimes a check with one of the lesser-known, smaller society can get us a result.”
The smaller societies, it seems, are adopting a more individual approach. They are often itv seems, basing decisions on a varied and more focused kind of consideration. They are often less automated in their approach than the larger societies.
Adds Paul,”The smaller societies, of course, have less people to work with so they are able to spend more time considering the ins and outs of each of their cases. But, aside from that, in terms of attitude, they have, in my experience, seemed to be keener to make something work instead of adopting the instant “it doesn’t fit – so it’s out” attitude.
So often, the response these days from the larger lenders, with all their backlog of anxiety is that each and every single criteria box must be at least treble ticked.”
The mortgage expert’s view is that this more flexible, small society approach can better suit the likes of the self-employed customer, who might, for example, keep profits in their company and take only a small salary, and, also, first-time buyers, who may fail strict affordability checks, even though they are paying a bumper rent each month anyway and proving a good record of payment that way.
Adds Paul, “Just a slightly more considerate view of someone’s circumstances can make such a difference. We are finding that this flexibility isn’t there with the big lenders. Having said this, it should also be noted that with the smaller societies applications can be more detailed and intricate and the interest to be paid can be higher.
Make it happen
A good deal with a small society can get done nowadays if you know where to go and that’s why working with a well-connected local agent with a good lending network, such as we have at Ainsworth Lord Estates, really can help get in that ‘hot’ deal opportunity with a smaller society and so make a move happen,” said Paul..