'Missed or late payments' enters top broker searches: Knowledge Bank
Rising interest rates, changes in borrowers' circumstances and lenders’ tightening criteria has heaped pressure on brokers.
"2023 has started with an uncertain financial landscape for many existing and prospective borrowers."
Knowledge Bank’s monthly criteria index has revealed a shake-up in the most popular searches performed by brokers at the start of 2023.
The January criteria index shows that in the residential category the search for ‘missed or late payments’ shot up the ranking of the top five most common searches to second place. Another change was the search for ‘interest-only’ which entered the top five this month suggesting that borrowers are looking for ways to keep monthly payments as low as possible.
The buy-to-let sector saw the top two searches for ‘lending to limited companies’ and ‘first-time landlords’ retain their places for the second month in a row. However, the search for lenders requiring the ‘borrower to be a homeowner’ rose to the third spot and the search for ‘interest-only/part-and-part single applicant’ re-entered the top five after dropping out last month.
Criteria searches in the equity release sector saw a shake up with ‘married couple application in a single name’ claiming the top spot. Other changes of interest include the search for early repayment charges which, as the third most popular search in January, suggests that borrowers are worried about being tied into a higher rate should prices fall in the future.
The most popular search in the second charge category was for ‘maximum LTV’ once again followed closely by the ‘minimum loan amount allowed’ and the ‘maximum age at the end of the term’. However, entering the top five searches in January was the search for ‘nregulated buy-to-let’ which shows an appetite from borrowers to use secured loans for commercial buy-to-let premises.
Bridging and commercial loan searches also saw a January shake up with ‘regulated bridging’ the most popular search in the bridging sector followed closely by ‘minimum loan amount’ and ‘maximum LTV’ taking up the top three spots.
Knowledge Bank CEO, Nicola Firth, said: “2023 has started with an uncertain financial landscape for many existing and prospective borrowers. With the bank of England base rate rising to 4%, household budgets are being stretched and placing mortgage cases has become increasingly challenging for brokers. Lenders continue to refresh products with more regularity than normal, and criteria tweaks are being made in an attempt to adjust to customers' needs. It is therefore more important than ever that brokers get it right first time by ensuring that a borrower fits criteria prior to product sourcing and submitting an application.”
