Precise Mortgages

Following on from last week’s column regarding scorecards I will attempt to debunk the differences between a lenders’ lending policy and scorecards.

Lending Policies outline what type of lending the organisation will accept and takes into consideration things like, LTVs, income types, geographical rules, property type, age of borrower, residency and a whole host of other things.  So if two lenders had the same lending policy and one used scorecards and the other didn’t and they were underwriting a case that had unusual income for example, this would be picked up by the lending policy and would have nothing to do with scorecards.  Most likely in this scenario both would come to the same conclusion; it either fits policy or it doesn’t.

I can only comment on Precise Mortgages scorecards and what they do is what a good underwriter would do; they look at the borrower’s individual financial situation and they assess the likelihood of that borrower to repay their debts.  They pull down the individual borrowers credit file from Experian and if it shows that the borrower has got a history of not paying on time or has more debt than they can service it will give the case a low score and vice versa for a borrower that always pays on time it will give a high score.

Scorecards are consistent and give decisions in quick order.  They won’t always say yes but in the event of a no the broker will know immediately and can look for another lender.  In addition to the scorecards we have a team of underwriters who check every single case to ensure that a sensible decision has been made and that the scorecards are functioning as expected.  Anyone that tells you that a lender turns down good cases because of scorecards is barking up the wrong tree.  A lender will take on loans that fit its lending appetite and its views on responsible lending, whether the lender uses scorecards or not does not affect this simple truth.