The surprising use for specialist lenders

The second reason, however, has been more important and it may be more surprising – speed of service. It’s service that’s proving a real catalyst for brokers in choosing to use specialist lenders for the first time, with some applications going through to offer in days.

So, why is it that some specialist lenders are leading the way in service delivery, when the traditional misconception has been quite the opposite?

The reason comes down to the operating model on which specialist lenders are built. Whereas high street lenders have developed clever algorithms capable of automatically assessing mortgage applications from customers who fit a standard pattern of circumstances, specialist lenders have needed to offer something different.

So, they have built systems and processes, based not on automated decisions, but on supporting expert underwriters to make decisions on applications that do not fit the standard mould.

This has become more significant in recent months because the pandemic has thrown a spanner in the works of automated decisioning. It’s difficult to make a robust risk-based decision on the basis of long-term trends when the last year has been such an anomaly. Consequently, mainstream lenders that are used to delivering automated decisions are manually underwriting a much larger proportion of applications so that they can better understand how Covid has impacted people’s finances before committing to lend to them.

However, whereas specialist lenders are set up for individual assessment of every application, this isn’t a core part of the operating model of a high street lender and so, naturally, the process is likely to take a bit longer. In addition, this dynamic has been layered upon other challenges such as remote working, social distancing and increased rates of absences, meaning that some lenders have struggled to deliver their usual service levels.

This is where some specialist lenders have excelled – successfully handling increased application volumes, whilst remaining up to date and responsive to enquiries. Many lenders, including specialist lenders, now publish their service times on their website, meaning that you can always make an informed choice before making a customer recommendation.

So, when you think about when to use a specialist lender, don’t just think about complex circumstances. You should also consider service levels.