31 October 2022

Complex Income

By Vida Homeloans

It is often said that trends and changes to the UK economy swiftly follows that of the US. Well interestingly, in July CBS news reported a rise in US workers taking on second jobs to cope with rising inflation. Could we also see this trend in the UK too?

Well those with second and third jobs are just one set of client types who would potentially fall into the category that we at Vida Homeloans call “complex income”.

What do we mean by “complex income”?

Clients whose income are complex can be those that are employed, self-employed, sole traders and those second jobbers. This can include NHS workers, whose payslips are often complex due to varying shift patterns and overtime. There are sales professionals with a high proportion of commission income, self-employed workers whose income varies and is made up of salary, dividends, and director loans. There are contractors and freelancer clients who have income from multiple sources, such as pension funds, trusts, rental income, benefits and second jobs.

Clients with complex income can come from all walks of life and the enquiries our Key Account Managers receive are unique with no two cases are ever the same. It’s such a wonderfully interesting and diverse sector of the market.

Adapting to a new economy

As mentioned above, with rising costs of living and rising interest rates, could we see more people take on second jobs for some extra income? Will people be seeking to earn more overtime? Will people be cashing in investments?

The mortgage market has changed and will continue to do so, and one thing we have learned at Vida over the last two years, is being able to adapt. It is not always easy to predict the future, for example this time last year, did anyone predict a war in Europe and spiralling fuel prices? As the market continues to change, so will the type of lenders brokers deal with and at Vida we believe there could be more complex income based cases around the corner.

Agility Is The Key

When it comes to mortgages, most lenders prefer the more straightforward cases - those that tick all the right boxes. However, the real world is different. There are clients whose needs are less straightforward, such as those with more complex income. For such cases, brokers need lenders with slick technology and people who can help solve their problems.

Mortgage brokers will want to pick up the phone and discuss the case – be it with a local sales contact or an underwriter. They will want some certainty that a lender will be able to help with the case. They will also be looking for a lender who can take a view on the case, by applying experience and common sense to make an informed decision. At Vida Homeloans, we go a stage further and have created a “Complex Forum” where a group of people will review the trickier cases, with that view of trying to find a solution to lend. This adds to our agility.

Relationships Are Pivotal For Success

When it comes to complex income cases, broker-lender relationships have never been so important. Relationships build trust. Through relationships, it becomes more of a partnership approach, with lender staff listening to the story behind the case and helping the broker present the case and provide the right documentation to get a quicker response. This becomes win:win; it’s working together where lenders like Vida can add value to brokers.

Such an approach is going to be vital for brokers as the market continues to change as we all adapt to a new economic backdrop. It will be interesting to see if the CBS news story from July in the US makes its way to the UK.

Visit our website at Vidahomeloans.co.uk

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