04 Nov The Apparent Demise of the Middle Man
I was speaking with a friend recently about a mutual contact who left our industry last year. He was explaining how tough he thought it had been out there and to me, made the most bizarre conclusion:
‘Who needs a middle man these days?! You can just go online…!’
The mortgage market has always been and continues to be a minefield. Both products and criteria are constantly evolving with the biggest changes in recent years being affordability models (as opposed to income multiples) and the demise of interest only and self certification products – all of which is an impact of the Mortgage Market Review (MMR). This certainly makes the market place a much more responsible one but it can make things rather complicated when sourcing and applying for mortgages.
We’re all of course entitled to our own opinion, but with the forthcoming implementation of MMR next year I just feel that his comment couldn’t be further from the truth.
However, I have to admit sourcing an interest rate is not difficult; particularly with the likes of Moneysupermarket.com – so long as you ignore all of the advertised products! On the other hand, criteria is a whole different kettle of fish. These websites (and even the Banks websites themselves) are very unlikely to confirm the absolute maximum they would be prepared to lend (I know of at least 2 lenders that will offer the equivalent of over 5 times income but this wouldn’t information available on their websites), or the fact that the borrowing would be restricted because you owned an additional property or they wouldn’t lend at all due to the previous owners owning the property for less than 6 months. As ‘middle men’ it’s imperative that we’re aware of all of these hurdles as it saves both the client and ourselves lots of time if we know who do go to however straight forward the situation might appear on the face of things.
Apart from the advice side of things, I heard recently from an industry figurehead that on average it takes 11 hours for us as professionals to process a mortgage application – I dread to think the time it might take someone without experience of the banks and FCAs requirements!! In a world where our default answer to ‘How are you?’ seems to be ‘Busy’ do any of us really have 11 hours to spend on paperwork when it can be outsourced for a fairly nominal broker fee?
I’m very pleased to say that from where I’m sat, the need for a ‘middle man’ is possibly greater than it’s ever been. Rob Sinclair of the Association of Mortgage Intermediaries expects broker market share to be at around 60% this year and likely to rise through 2014, so I think the general public would be inclined to agree!