Dena Thompson, Head of Underwriting shares her tips to successful underwriting
Despite technology helping streamline the underwriting of short term loans, there are several tips for brokers to follow as underwriting these loans still rely on human interaction, according to Dena Thompson, Head of Underwriting at Alternative Bridging Corporation (Alternative).
– Provide clear and concise information to the lender from the start, this may sound obvious, but simply stating the purpose of the loan, any title issues or restriction on the security, details of the parties involved;
– Submit all relevant documentation required e.g. application form, AML documents etc., and also volunteering additional supporting documents at an early stage (i.e. borrower CV, company structure charts, tenancy/ lease/ planning information, estate agents details, etc;
– Ensure the borrower or their solicitor start the process of obtaining consent or Deeds of Priority from the first charge lender as soon as Heads of Terms have been accepted for second charge lending;
– Keep in regular contact with the lender’s Business Development Manager and/or underwriter on the progress of a case from enquiry through to redemption and vice versa;
– Make sure the borrower has chosen an efficient solicitor used to dealing with short term lending, and ensure the lenders’ own panel of professionals (solicitors, valuers, and monitoring surveyors) is of a high standard;
– Make it clear to the lender when a completion deadline is known – often lenders are told completion is ‘ASAP’ but are rarely told that a borrower is in notice to complete and they have a definitive 10 days to complete or lose their deposit.
Thompson says: “Whilst technology is certainly an advantage for lenders, having a team of experienced underwriters is invaluable in being able to process ‘alternative’ deals. There also needs to be a mutual understanding, respect and trust between the broker providing the information on a deal and the underwriter responsible for assessing that information. The end goal is for all parties to ensure loans complete, quickly, efficiently and ‘safely’.”