Melanie Spencer, business partnership and growth director at One Mortgage System (OMS), discusses the importance of understanding the specific needs of different borrowing types and why being armed with the right product at the right time for them is vital.
Love it or hate it, Apple is one of the world’s largest and most well-known brands but how did this come about after falling behind in the computer and software market in the late 1990s?
The key word that springs to my mind is diversification, starting with the groundbreaking launch of the iMac and iBook series in 1997. This was followed by the launch of the iPod (remember that?) thanks to the rise of digital music downloads but the biggest success in product diversification undoubtedly came in the form of the launch of the first iPhone back in 2007.
On the back of this, the company has been able to create an entire ecosystem of interlinked tech products – a core driver of its entire business model, it has also acquired many smaller firms along the way to improve this product suite.
Now, I’m not suggesting that OMS is the Apple of the mortgage world or will turn into this, what I am saying is how important it is to embrace the right ways in which to diversify offerings at the right time.
In a time when borrowing needs are changing, the intermediary market has to evolve in line with ever-shifting market forces. By this I mean evaluating time and cost effective ways to tap into potential new markets to bolster incomes streams, better service existing client needs and build a more-rounded platform to attract new clients. A key component within this will be exploring the specialist markets i.e. complex buy-to-let, commercial mortgages, second charge and short-term finance, amongst others, which some advisers may not be so familiar with.
There are also areas within the residential market which would benefit from greater levels of expertise. For example, research from TML recently outlined that 30% of self-employed individuals have never applied for a mortgage because they didn’t think they would be approved. In addition to this, 26% said they heard it’s more challenging for self-employed people to get a mortgage.
Looking at other reasons why self-employed people have not applied for a mortgage in the past, 36% said it’s because they had not built up their deposit yet, while 17% said they’re waiting for interest rates to come down, making mortgage payments more affordable. 10% said they find the process too daunting. 15% said their business is less than two years old and therefore they don’t have the necessary documentation to prove their income when applying.
This data helps highlight the importance of understanding the specific needs of different borrowing types and the opportunities provided by specialist lenders who assess income in a different way to make mortgages more accessible to those with complex income structures. With an ever-changing client base whose circumstances change throughout their lifetime, being armed with the right product at the right time for them is vital. A true CRM can provide that journey without the need to use multiple systems.
Technology will play an integral role in this journey, especially when it comes to working with a CRM system which can help open the doors to such markets and streamline the whole process for advisers. Diversification can be daunting but working with the right tech partner will negate any steps into the unknown and provide the support to focus on the areas which can add real value to your business and your clients. And this should be an ongoing partnership to help firms transform opportunities into tangible growth going forward.