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Specialist Mortgage Lenders
At Clifton Private Finance, we work with the wide marketplace of UK mortgage lenders - but what does that mean? Is there any difference between a high street bank and one of the so-called ‘specialist mortgage lenders’? Well, actually, yes there is! In this guide we take a deep dive into some of the different specialisms niche mortgage lenders work with, and why they make a difference to you when you’re looking for the perfect mortgage.
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What Makes a Specialist Lender a Specialist?
There can be a lot of confusion over what exactly a specialist lender is. In comes down to the focus during the underwriting process, the stage of a mortgage application where the lender’s team assesses you as a risk. During underwriting, the lender looks at your income, your credit history, age, the type of property you are looking to buy, and a whole range of other criteria to evaluate how likely you are going to be able to make the monthly repayments.
The main banks, places like NatWest or Barclays, tend to use an automated underwriting process where a computer puts the information provided through a sequence of set rules to quickly accept or decline your applications. It is a true ‘computer says no’ moment when you get rejected, with the bank’s advisor lacking the authority needed to override these rules.
It’s an efficient process for the very busy banks, but it does mean they are limited to providing mortgages to applicants who meets their strict and basic criteria. If you step outside of that in any way, it can feel incredibly frustrating. In truth, however, there’s bound to be another applicant behind you in the queue - one who better fits their inflexible model.
In this way, mortgages offered by the high-street banks tend to best fit ‘standard’ applicants - those who are earning a clear PAYE salary and looking to buy a house in a very usual way.
Thus, a spread of specialist lenders has developed in the UK, each with a dedicated underwriting team who really understand their niche and make each decision taking the application in context. When you come to Clifton Private Finance, you are partnering with a broker who has established relationships with the whole marketplace of UK specialist lenders - your desired mortgage is just around the corner.
The Role of Clifton Private Finance
Because specialist lenders don’t leave all the decision making to a computer, they take a little more time with each application. If they just advertised their services directly to the public, they would be inundated with unsuitable applications and the administrative burden would be very difficult to manage. To prevent this, they choose to work through a trusted gatekeeper - the broker.
Our part in the process is to take the time to discuss your mortgage needs in detail, so we can determine which of the specialist lenders is the best fit for you. We know what’s available, with a dedicated team who spend time every day keeping up-to-date with the latest developments, and can act as a guide. The mortgage lenders trust us to only bring them viable applicants, and to smooth the process by presenting the application and all associated paperwork in the most efficient way.
When you work with Clifton Private Finance, you get:
- Personalised advice
- Access to the full range of potential specialist mortgage lenders
- A professional evaluation of the options to get you the lowest rate and most flexible terms
- Long-term support throughout the mortgage process and beyond
- An efficient application with a greater chance of success
Making a mortgage application with Clifton Private Finance alongside is the best way to get an ideal, cost-effective deal.
The Range of Specialist Mortgage Lenders
Niche mortgage lenders each have a chosen specialisation - though some will be large enough to cover multiple different circumstances. Some of the situations they can help with include:
Self-Employed Mortgages
While the larger banks have become more understanding of self-employed applicants over recent years, there is still a need for the specialist lender in this arena. Self-employed people, from recent sole-traders through to established company directors, can come across numerous challenges when looking to a mortgage, including:
- Meeting requirements for accounting records
- Explaining complex multiple income streams
- Realistic evaluation of affordability and effective salary
- Fluctuating and seasonal income
- Adjustments based on recent business growth
- and more…
Specialist lenders who understand the self-employed sector will be able to evaluate your position, going through your finances in more detail and with a holistic eye to ensure that the mortgage offered properly represents your true financial strength.
Case study: Our case study below explores how we used a director's loan as deposit for a large self employed mortgage
Expat and International Mortgages
Obtaining a UK mortgage from outside the country can be especially complicated. The potential lack of a current UK credit history, bank accounts in foreign currencies, and salaries difficult to verify can make approaching a high-street bank a pointless exercise.
Lenders well-versed in expat and international mortgages can cut through these challenges. They understand the finer nuances of currency exchange, can decipher foreign pay structures and taxation, and are able to make a true evaluation with confidence.
Case study: Read our case study below on how we secured a 90% LTV mortgage for a £2.8m home for an expat family
Multiple Income Stream Mortgages
Traditional mortgages tend to be based purely on your PAYE salary. While some high-street mortgages have room to consider a secondary income, fluctuations in this revenue can lead to additional complications and an eventual rejection.
Specialist lenders do not suffer the same lack of flexibility. With the right lender, your true income can be accurately represented, with multiple income streams and inconsistent payments properly calculated and evaluated. This leads to a larger mortgage maximum, improved affordability and stress testing, and a greater chance of application acceptance.
High-Value Mortgages for HNWI
High net-worth individuals can often have complicated financial portfolios, with income and affordability difficult to ascertain using traditional rules-based systems. Personalised underwriting provides the additional flexibility required to build a suitable picture of mortgage viability for very high value properties, allowing both tangible and intangible asset equity to be considered when determining deposit levels and mortgage LTV.
Case study: Read our case study below on how we secured a £20m mortgage for a Surrey home
Mortgages for Non-Standard Homes
In a similar way to how standard mortgages expect a traditional employment profile, they also face challenges when making valuations on unusual properties.
The standard rule of thumb that you ‘cannot’ get a mortgage for a building made of non-traditional materials, or those situated in off-grid rural locations, for example, does not necessarily apply when dealing with a specialist lender. Mortgage providers with expertise in making niche valuations and will full understanding of the resale market - essential for risk mitigation - will be able to offer mortgages in many circumstances where high-street banks are simply unable to help.
These may include:
- Homes of unusual builds - such as cob houses, wooden structures, or properties on water.
- Properties in extremely rural areas - off-grid homes, those on islands, and properties lacking modern infrastructure.
- Development finance - loans to cover property renovation as well as sale, bringing homes to a necessary habitable standard.
Bad Credit Mortgages
Applicants with poor credit scores and a history of financial difficulties often face rejection from major banks as they do not fit the profile. Being told to build your credit profile and come back six months or a year later can be disheartening.
Specialist adverse credit mortgage lenders and so-called ‘bad credit mortgages’ offer a range of products that take into account your true financial situation, understanding the work you are putting in to improve your credit score and work your way out of any damaging history. With understanding evaluation and underwriting, these specialist lenders can provide competitive mortgages for people who have a low credit score or who have previously faced IVA or bankruptcies.
Auction Mortgages, Bridging Finance and Short-Term Lending
Buying at auction or seizing other property opportunities often requires funding at a quicker pace than a traditional mortgage can offer. With a strict 28-day deadline for auction payments, and mortgage regulations that can make building properties in need of renovation difficult, high-street banks are rarely able to offer support.
Through Clifton Private Finance, you can access powerful short-term ‘bridging’ finance, that considers alternative criteria and securities to provide money at short notice. The bridging finance has no monthly repayment, instead structured such that it is repaid once the full mortgage application is approved. Working with specialist bridging and mortgage lenders, CPF can ensure the whole process is smooth, enabling you to purchase the properties you’re after with no delay.
Buy-To-Let Landlord Portfolio Mortgages
Landlord buy-to-let (BTL) mortgages for single properties, large scale HMO (Houses in Multiple Occupation) and MUFB (Multi-Unit Freehold Blocks) mortgages, and multi-property portfolio mortgages are all available through specialist lenders who work every day with both individual and limited company landlords.
These specialist mortgages can offer greater flexibility and more competitive rates than traditional banks, allowing you to shape your mortgage around existing equity - maximising buying power and rental profits.
Commercial Property Mortgages
Specialist lenders are able to offer mortgages for more than just residential property. Commercial properties, such as offices, warehouses, rental units, restaurants, and more are all available through dedicated specialist lending.
With a more focused understanding of these sectors, specialist commercial property lenders can offer more flexible mortgage terms, developing custom profiles that better meet your needs, whether as an individual or for business use.
With commercial property also providing a good investment, with strong long-term rental yield and potential for significant return on investment, landlord applicants are also encouraged to explore a range of BTL and portfolio options.
Mixed-Use Mortgages
Buying mixed-use properties can involve complicated underwriting and mortgage terms, blending the needs of a commercial investment with a residential home. Specialist lenders who work regularly in this space are better suited to provide a comprehensive mortgage product that fits your needs.
Examples include purchasing a pub as an owner/landlord, with a residential home above the public areas that may either be lived in, or rented out to managerial staff; buying a flat with retail space for a shop underneath; or obtaining a multi-use artist workshop with adjoining apartment.
While high-street banks may reject these conjoined mortgage applications or insist on two separate mortgages, each with its own underwriting and monthly repayment contract, specialist lenders can tailor a single product to meet your exacting needs.
Retirement and Lifetime Mortgages
Obtaining a mortgage to downsize in retirement or release locked up equity for other uses can be difficult without the support of an experienced broker and specialist lenders.
With a range of products designed with retirees in mind, specialist retirement lenders are here to help you make the most of the money tied up in your existing home, offering flexible solutions that can be used to:
- Downsize smoothly
- Buy a holiday home for seasonal use
- Invest in rental property
- Release equity to support family
- Consolidate debt
- Provide additional funds for retirement
- Help with care costs
With the right advice and specialist equity release mortgage solution, you can get access to the capital your home represents without any risk to yourself or your living arrangements. Clifton Private Finance is here to help with independent advice and introductions to the right lenders.
The Pros and Cons of a Specialist Lender Mortgage
Together, specialist mortgage lenders offer a wide range of products that are tailored to fit your specific circumstances. With CPF by your side, finding a mortgage to make your plans a reality is just a few conversations away. However, opting for a specialist mortgage should be done as an informed decision, understanding the disadvantages as well as the advantages:
- Mortgage interest rates - Specialist lenders are competitive and in many cases will be able to offer equal or lower rates to a high-street bank, however, mortgage rates are based on your risk profile. If you are approaching a specialist mortgage lender with a higher-risk prospect, you may not be offered the headline rates you see advertised. Examples include: adverse credit mortgages, properties of unusual construction, or expat mortgages.
- Fees - Some specialists will charge slightly higher fees than high-street alternatives.
- More complicated application process - In order to properly evaluate your individual circumstances, specialist lenders may require a greater amount of information and go into your situation in more detail than a traditional bank. This can mean requiring extra paperwork, or having to develop a more comprehensive overview of your personal circumstances. Your CPF advisor will help you collate and present this information, ensuring that you put forward the best application.
- Longer underwriting - While some specialist mortgages have been developed with speed at the forefront, many specialist mortgages require a deeper level of risk assessment, valuation, and general underwriting. We will advise you in advance of a realistic timescale, but a specialist mortgage may take longer than a standard big bank mortgage.
- Initially rigid terms - Some lenders may set fixed terms with larger Early Repayment Charges (ERCs), but these usually soften once you’ve built a track record and improved your risk profile, opening the door to greater flexibility later on.
Of course, these disadvantages are often comprehensively mitigated by the general advantages you get going to a specialist, which include:
- Obtaining a mortgage where a high-street bank will reject you.
- Gaining a deeper relationship with your lender for added understanding and flexibility.
- Exploring and comparing specialist products to get the best terms and most competitive interest rates.
Specialist Mortgages with Clifton Private Finance
Clifton Private Finance is a whole-of-market broker, which means that in addition to our relationships with the wide range of UK specialist mortgage lenders, we also work with the traditional high-street banks. We work fully to support you, our client, and will consider all the mortgages available to get you the best possible deal. If that means approaching a specialist lender, then that’s what we will suggest, but we don’t dismiss the common banks out of hand.
We will discuss and evaluate your personal circumstances with you, building a realistic profile of your mortgage requirements, and making recommendations on the most suitable lenders to approach. Together, we will find the right lender, compare rates and terms, and help you make an informed decision whether or not to proceed.
When you come to CPF, you get expertise and a dedicated mortgage ally, working for you to find the best deal for you. If you think a specialist mortgage is right for you - or just want help finding the best high-street deal - call for a free consultation with Clifton Private Finance today.
