Why lender criteria knowledge matters more than rates for brokers

The mortgage broker's value proposition has shifted. Where rate comparison once defined the role, navigating opaque lender systems and advocating for clients who have already been rejected by automated processes is increasingly where the work is done.

Jack Stevenson (pictured top), branch manager and senior mortgage and protection broker at The Mortgage Library, has seen the change first-hand. Working through Sesame Network with a focus on mainstream residential and first-time buyer cases, he argues the ability to read lender criteria in detail now matters more to a broker's effectiveness than the rates on their screen.

"Most people can get a mortgage," Stevenson told Mortgage Introducer. "It's just about going through the criteria, finding the select lenders that will do it. Knowing the criteria is going to allow you to navigate that bit better."

When the system says no

Automated income and credit checks present one of the most persistent friction points in the early stages of a mortgage application. Stevenson describes encountering what he calls a "computer says no" attitude from some lenders, where a system-generated decline bears no relationship to the client's actual eligibility.

He pointed to an experience with Accord Mortgages as an example. After Accord's system declined a decision in principle, the same client came back two days later having already received a full mortgage offer from the same lender through their existing broker. When Stevenson called Accord to understand what had happened, he learned the lender's system is designed to decline first, requiring brokers to appeal for a manual review.

"Their system is designed to say no and then they'll personally look at it," he said. "What I'm finding is a lot more lenders such as Accord, Suffolk Building Society, a few other lenders are definitely giving me more of a manual approach, and they're the ones that I can go to and pitch a case to and get them to look over it from a human level. That is so important with this kind of work."

A similar dynamic played out with Nationwide, where a client who had been declined was subsequently approved after Stevenson moved the application to a 35-year term rather than 34 years. The difference was sufficient to change the outcome, yet nobody had flagged it to the client at the point of initial rejection.

For brokers handling cases where mainstream lenders have already turned down applications or where complexity sits beyond the standard mould, the gap between a system refusal and a workable outcome often comes down to exactly this kind of granular criteria knowledge.

Transparency with clients about the process matters too. Stevenson said he makes a point of walking clients through the obstacles he has had to overcome on their behalf. "Sometimes I'll get to the end of the day and I'll explain to my client the hoops that I've jumped through to fight their case, and nearly every time that I do that, they are exceptionally grateful because they see the work that we do, they see the results, rather than simply saying, here's your bank, this is who will do your case for you."

A broadening client base

The range of income types brokers now encounter has widened considerably. Stevenson noted industries not previously associated with mortgage applications are now generating clients, which has required continuous upskilling rather than a fundamental change in how cases are handled day to day.

The shift, he said, is less about structural complexity and more about the pace of change in how people earn. "Things change, industries change. It's just people looking for different scenarios to either invest or make money. As long as you're learning on the job and understanding that as things get more difficult or more complex, you're also improving and you stay on top of everything."

There are also lenders whose appetite does not match their apparent criteria. Stevenson noted some will appear willing to do a case, but in practice do not have the risk appetite for it – something only visible to brokers working closely with lenders across complex and mainstream income cases on a regular basis.

A stigma problem

Despite the growing complexity of the role, Stevenson believes the wider industry has not done enough to communicate what brokers actually do. Part of that, he argues, is rooted in how the word "broker" lands with the public.

"Before I got into the industry, I would associate the term broker with almost like a money man, a middleman that's making money or dealing or selling," he said. "And the reality is brokers are fighting for the best interest of the client."

The dynamic between banks and brokers is not simply adversarial. Banks sometimes encourage declined clients to seek professional advice, with Stevenson describing a Halifax client who was referred to him directly after their application was turned down. At the same time, he has had remortgage clients contacted by their existing lender with retention rate offers that, on closer inspection, sat above what was available on the open market through a broker.

Both scenarios point to the same underlying issue. Many borrowers do not understand what a broker does or why working through an intermediary can produce a different outcome to going direct. Brokers operating across the self-employed and mainstream residential market are often the fallback when direct channels fall short.

"It almost comes across that we're trying to sell them something," Stevenson said. "But the reality is we're purely working in their best interests under the FCA's regulations."