Our CEO Steve Seal met with Haysto to talk about all things complex credit! Read his interview below.
A lot of people haven’t heard of Bluestone. Can you give us an introduction and background to what you are doing?
Bluestone Mortgages is an innovative and tech-led specialist lender operating within the UK. We offer tailored mortgages to non-standard borrowers. This includes those that are self-employed, contract workers and individuals with poor or complex financial histories – groups which are typically disenfranchised from mainstream lending – with a particular focus on serving the complex credit community. We pride ourselves on our inclusivity and our ability to support borrowers who don’t fit the “vanilla” mould of the high-street banks’ lending criteria. We understand that sometimes life isn’t always straightforward, but getting a mortgage should be – and nobody should be prevented from owning a home – that’s why we’re affiliated with Haysto!
Why are you able to help, when the high-street banks won’t?
At Bluestone we understand that every customer is different, from the way they work, how they get paid, and what measures they take to manage their money, so the automated ‘one size fits all’ approach won’t work for every borrower out there. We take the time to understand each customer’s unique situation, without any credit scoring.
Why do customers have to use a specialist broker to access your mortgages?
Bluestone is an intermediary-only lender, meaning that we exclusively distribute our products through advisers in the UK which you can access via Haysto. These specialist brokers are equipped with expert knowledge of the complex credit lending market and are experienced in dealing with a wide range of customers with differing needs. They are particularly adept at supporting customers with atypical or poor financial histories, as they can highlight the various options available to them. In many cases, borrowers aren’t even aware that these solutions exist. Where high street lenders would typically turn customers away, our intermediary partners put them on the right path to securing a mortgage.
Why should customers use a specialist lender like Bluestone?
It all comes down to flexibility. Our ability to assess individuals based on their unique circumstances as opposed to having a list of criteria set in stone really sets us apart from the high street banks. We look at people as individuals, with personal nuances and a unique set of circumstances. We firmly believe somebody’s credit score should not define their eligibility for lending, nor should life events from their past.
How does your underwriting process differ from the high-street banks?
There are three standout factors which set our underwriting process apart from that of the high street banks. The first is no credit scoring. Things can happen in life which are out of our control, which means that people can find themselves in financial difficulty through no fault of their own. We understand that someone’s credit score alone will not always provide the most accurate picture of their financial situation, and for this reason, we will look at their overall financial circumstances, both past and present, to gauge their eligibility for a loan. The next factor is our ability to underwrite applications on a case-by-case basis. We will always review and assess a customer’s individual financial circumstances to help them achieve their dreams of home ownership. Finally, the third factor is that we can deal with items such as Individual Voluntary Agreements (IVAs) and County Court Judgements (CCJs), which high street banks typically cannot.
There’s a misconception that people with complex credit will default on their mortgage payments – how does Bluestone address this misconception?
By assessing a borrower’s financial history, as well as where their finances are currently, we can determine whether they are in a stable position financially and can therefore meet their monthly repayments. Complex credit borrowers who’ve had instances like CCJs in their past may well have recovered from these. By gauging their current financial position, we can assess whether they will be able to meet their mortgage payments.
What impact do you think the cost of living crisis will have on the specialist mortgage market?
The rising cost of living will put pressure on us all. Specialist mortgage lenders, including Bluestone, are experts at understanding customers’ unique circumstances. This expertise – and specialist lenders ability to individually assess each application – will ensure they can factor the expected increase in living costs into their assessments and continue to provide solutions for customers where the loan is affordable.
What do you think will be the greatest areas of innovation for the specialist mortgage market in the near future?
As the complexities and intricacies of borrowers’ needs continue to change, specialist lenders will need to evolve and adapt accordingly, particularly those in the complex credit lending space. First and foremost, I suspect that we will see lenders in this market adapting their credit policies to suit new and evolving customer demands. In addition, we are likely to see more complex credit lenders basing their lending decisions on shorter periods of recovery when assessing applicants. For instance, before the Covid-19 crisis, some lenders may have only accepted a borrower on the condition they have been financially secure for a period of at least 12 months, regardless of any setbacks they had experienced before this. However, as we emerge from the pandemic, this period could shorten as lenders are approached by a growing number of borrowers who have experienced more recent financial blips.
What is your personal focus for the next 12-18 months?
A personal focus of mine will be strengthening and developing the business. There is no time for standing still; as the complex credit lending market grows, we need to grow with it. We are always looking to expand our team and recruit the most talented and qualified staff, as well as grow our network of broker partners, because to garner the best results for end-customers, you need the best team.
What changes do you hope to implement in the industry?
Along with Bluestone’s efforts in this space, I hope to improve financial inclusion for consumers, and I believe technology will go a long way towards achieving this. Most of the eligibility tools out there are generally tailored towards mainstream or “vanilla” borrowers and therefore exclude those with more intricate borrowing needs. By carrying initiatives such as Open Banking over to the complex credit lending market, “non-vanilla” customers will be able to access lending more quickly, and we’ll be able to reassure them that the financing they need is within reach.
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