10 ways to support your first-time buyer clients

Aspiring homeowners need your expertise to access a mortgage in this challenging market, says Nicola Goldie, Head of National Accounts at Virgin Money

Getting on the property ladder has been tough for a long time but, in the last year, it has become harder for some borrowers to access mortgage finance.

Maximum LTVs have been squeezed, and lenders, with their commitment to responsible lending, are assessing finances more closely than ever, due to the pandemic.

It’s still possible for first-time buyers to get a great deal, but they need the guidance and expertise of a broker more than ever.

So where do you start?

1. Explain the process

You know the mortgage and purchase process inside out. They’ve never done it before, so explain the steps to them at the outset – including what happens when and the mortgage basics. You’re the expert.

2. Help them get mortgage ready

Show them how to prepare their finances for a mortgage application – manage their budget, stay in the black, get on the electoral roll, save as much as possible and avoid payday loans.

3. Can they boost their deposit?

If they need a high LTV mortgage, explain the current situation as they may not have a wide choice of competitive deals available to them. But, if they can save an extra 5%, they could potentially access more competitive products. They could also consider gifted deposits, which may be acceptable to mortgage lenders.

4. Introduce home ownership schemes

Tell your first-time buyer clients about affordable home ownership schemes. Help to Buy could be suitable if they want a newly built home and is available to them until 2023 in England, or they may be interested in shared ownership mortgages. Virgin Money supports both schemes with a range of products, and we’re happy to talk you through the options for your clients.

5. Can they boost their buying power?

Don’t forget to talk to your clients about deals that could boost their buying power, from guarantor-style home loans to professional mortgages and high LTV loans.

6. Warn them about delays

Manage your client’s expectations on mortgage processing times and the purchase process. First-time buyers may not be desperate to complete by the 31^st March to beat the Stamp Duty deadline, but they might be in a rush for other reasons, and they could get caught up in the backlog of cases.

7. Gather documentation early

Get your client’s documents as soon as possible – ask for them at the first contact. This lets you spot any red flags before you submit an application, such as discrepancies between what’s stated on their application and their documentation. Remember to upload their documents on day one.

8. Explain all the costs of buying

Ensure your clients understand the wider costs of buying. Most will be aware of Stamp Duty, but talk to them about their insurance options and obligations, such as buildings cover and possibly life insurance. Run through the other moving costs to ensure they have enough money set aside.

9. Warn them about fraud

Talk to your clients about potential fraud, particularly push payment fraud, and ensure they are cautious when transferring deposit funds.

10. Stay in touch

Hold your first-time buyer client’s hand through the whole process. Keep in touch regularly with updates, and reassure them if parts of the process are stalling. Good communication and service means they’ll remember you when they come to refinance.