Equifinance: affordability is key to specialist lending

By looking more closely at their affordability model, Equifinance says it has been able to lend to more customers.

The model establishes the precise level of net income based on the evidence provided and calculations of tax and national insurance payable on more complex cases such as director, shareholder and self-employed applicants.

The customer's admitted expenditure is then tested against metrics provided by the ONS and trigger figures provided by the common financial statement to establish thresholds for average expenditure.

Its standard affordability calculator also assists all introducing brokers by giving them a tool that matches precisely how it calculates surplus and stressed income during the underwriting process. This helps to mitigate surprises occurring post submission of a case and therefore potential poor outcomes for customers.

Tony Marshall, Managing Director of Equifinance, commented:

“By individually assessing each case and stress testing it against future changes to rates and circumstances, we are seeing there are real benefits in closely checking the affordability of each loan. This is allowing us to work closely with the broker and their client to make quicker and more accurate lending decisions.

“MCD has opened up a new way of thinking on the detailed areas of our process map and we are now able to help even more customers as a result. Second charge mortgages are back in the frame as a lending product of choice and this will continue to grow throughout 2016 as their awareness increases.”