The value of bespoke service: How it can save borrowers money

Today’s lending landscape offers a wide array of lenders and financial products. This variety allows for a better catering to the diverse needs of both prospective homebuyers looking to step onto the housing ladder, and property investors aiming to expand their property portfolios.

Regardless of whether investors are making their first purchase, or are experienced buy-to-let landlords, securing the appropriate financing for a property purchase is incredibly important.

Equally crucial is the choice of the lender providing this finance. Indeed, choosing a lender that distinguishes itself through tailored, bespoke services is not simply a matter of preference – it could be a potential source of substantial savings.

Of course, with typically higher costs when compared to mainstream lenders, the initial expenditure on a bespoke service may be larger. But, the overall value the specialist lender can provide may be higher to borrowers in the long run, dependent on their goals.

Understanding bespoke services

Long-term benefits aside for the time being, lenders who provide a bespoke service stand out for a number of reasons.

Expertise in complex properties

Bespoke lenders, like MFS, provide value when looking at loans for complex property types.

Unlike mainstream lenders who might rely on standardised algorithms and tick-box property criteria, bespoke lenders conduct thorough, individualised assessments of an investors current or potential property situation.

This approach allows us to accurately appraise properties that may have unique features, or fall outside the conventional valuation parameters.

For instance, period properties, or those with specialised features often pose challenges for traditional valuation models. Bespoke lenders, on the other hand, can use their expert panels, which are often diverse and also specialised, to attain the true value of such properties, ensuring borrowers receive financing that aligns with the intricacies of their circumstances.

Expertise in dealing with complex borrowers

Moreover, bespoke lenders are in a better place to deal with borrowers who may come across challenges when accessing finance from mainstream lenders. High-net-worth borrowers, for example, require a level of service that may go beyond conventional lending norms.

Bespoke lenders specialise in meeting the diverse needs of complex borrowers, and MFS’s expertise allows us to tailor financial solutions that cater to the intricate financial portfolios of high-net-worth individuals.

Whether it’s structuring loans against diverse assets, considering complex income streams, or accommodating unique investment strategies, bespoke lenders possess the knowledge to navigate the intricacies of high-net-worth borrowing.

Taking on deals that others cannot

Bespoke lenders also have a greater propensity to take on complex cases other lenders may shy away from. Indeed, bespoke lenders – like MFS – are able to provide a much greater degree of flexibility than mainstream lenders, allowing them to take on unique and intricate cases.

This is because lenders who provide a bespoke service do not use rigid, tick-box criteria to assess a loan application. Instead, they are able to adjust lending terms, structures, and criteria on a case-by-case basis.

At MFS, for example, we underwrite our loans and mortgages from day one of the application process. This means that we can make a nuanced evaluation of each borrower, allowing us to recognise the unique aspects of their complex cases.

As a result, whether a borrower has a complex credit history, intricate streams of income, a need for specialised products, lacks collateral or simply requires funds at pace, bespoke lenders can provide loans that match the specific needs and circumstances of their clients.

Types of bespoke services

So, what bespoke services do specialist lenders that high street lenders may not?

Buy-to-let mortgages

Buy-to-let mortgages are expertly crafted financial solutions tailored for landlords seeking to acquire properties intended for rental purposes. Bespoke BTL mortgages, distinguished by their adjustability when compared to regular mortgages, offer flexibility and a buffer period between the conclusion of bridging loan terms or initial property acquisitions and future long-term financial arrangements.

Furthermore, these specialised mortgages extend their support to diverse investment opportunities, encompassing holiday and short-term rentals, investors with credit challenges, registered companies and more. Explore MFS’s comprehensive range of buy-to-let mortgages.

Bridging loans

Elsewhere, specialist lenders can provide a bespoke service with bridging loans, which provide fast and flexible funding for property investments. These short-term loans can be used for the following:

• Secure an asset while long-term finance is arranged
• Bridge the gap between the sale of a property and the completion of another one
• Finance a quick renovation project
• Purchase a property at auction and more

Typically, these loans can last from three to 24 months. Find out about MFS’s different types of bridging loans.

How can a bespoke service potentially save you money?

While inflation is slowing, it’s still sitting at elevated levels and impacting the economy. Specifically, it has driven up interest rates over the past two years. As such, some borrowers may worry about encountering cashflow issues once their repayments start due to higher interest rates on loans.

Fortunately, lenders who provide investors with a bespoke service could potentially help to alleviate these issues.

Deferred interest options

In the face of elevated inflation, and concerns about increased interest rates impacting cashflow, bespoke lenders may offer deferred interest options. This provides borrowers with some breathing room, preserves immediate cashflow, and potentially mitigates challenges associated with higher loan repayments in an inflationary environment.

Rolled up interest

Rolled-up interest, a feature often found in bespoke lending services, is another valuable tool for borrowers navigating economic uncertainties. In the context of elevated inflation and potential cashflow concerns due to higher interest rates, rolled-up interest allows borrowers to defer regular interest payments. This approach preserves immediate liquidity and could thus help to save money in an inflationary environment.

Part-serviced payments

Bespoke lenders can also allow borrowers to partially service their loan using regular monthly payments and deferred interest in combination. Again, this enables investors to protect their cashflow, allowing them to potentially save money by navigating the impact of inflation and interest rate fluctuations with a customised payment structure.

How to choose lenders to attain a bespoke service

As with any financial decision, careful consideration is needed to find a lender and product that suits an investor’s situation best. Here at MFS, we pride ourselves on our flexibility and ability to offer alternative financing options and a bespoke service in even the most complex cases.

We do not use a rigid, tick-box approach to making decisions. Instead, we judge each application on its individual merits.

For example, if an investor were a landlord with a less-than-perfect credit score aiming to transform a run-down building into a buy-to-let property, approaching traditional high street lenders might present challenges due to their strict criteria.

Our bespoke approach, however, enables us to consider the future profitability of a property, mitigating risks and empowering us to embrace applications that might be deemed too complex or risky by other lenders.

This flexibility may come with an elevated initial cost compared with a high street lender, but in the long run it could help to secure  property investment plans, even if other lenders shy away.

Investors can use our bridging loan calculator to get instant insight into the interest rates, charges and other costs associated with our bridging loans. Similarly, our bridging loan rates table break down the costs of our bridging loans.