Good broking starts
before the product.

Priya Kainth00:00

What I’m seeing in cases at the moment is a lot of high-net-worth and ultra-high-net-worth people on a slippery slope. I’m not talking a little bit. They’re losing everything because they’ve mortgaged themselves up to the hilt.

Alastair Hoyne00:20

Welcome to The Property Escalator. I’m Alastair Hoyne, founder and CEO of Finanze Group and author of The Finanze Framework: Property Strategy & Finance Success.

I wrote the book around a simple idea. Property decisions work better when strategy, finance, legal, tax, valuation, delivery and exit are treated as one connected system. The Property Escalator takes that thinking into real conversations with people who operate at different points in the property journey.

I’m joined today by Priya Kainth. She’s going to give us the broker’s view of the transaction, including the judgement required to decide what can be solved in the mainstream market, what needs specialist input and when the client’s original request needs to be challenged before anyone starts looking for a product.

Alastair Hoyne01:05

Priya, thanks for joining me. You’re often sending me challenging cases, so how about we start there? How do you decide what you can place yourself, what needs specialist support and what should probably be challenged before it goes anywhere near a lender?

Priya Kainth01:21

Firstly, thank you for having me, Alastair. I really appreciate being here and I’m looking forward to today.

A good broker does a lot more behind the scenes than finding a good rate and bringing the business to you, because you’re amazing at what you do and very thorough. Before approaching a lender, I like to understand the client’s full transaction. It’s not just, “I need a mortgage” or “I need a bridging loan.” I like to understand the A to Z of the proposition.

I look at the property, borrower, outstanding debts, income, other assets and liabilities, source of funds, exit strategy and, most importantly, the long game. That’s ultimately the key to bringing everything together. I look at the whole situation.

If I don’t know the answer, I come to someone like you or experts in other fields, such as accountants and tax advisers, depending on the client. We need to do the best for the client, submit cases to the correct lender and go fully prepared with the facts and a greater understanding.

There’s no point coming to someone like you with a half-baked idea. The minute you ask a question, we’re not sure. That’s no good to anybody. The aim is the right lender for the right client, with a properly thought-through case, rather than putting in an application, hoping for the best and crossing everything in the process.

Alastair Hoyne03:10

Brilliant. It’s mapping out what the client actually wants. They might say, “I’ve seen these advertised rates. They look cheap, so I’ve decided to get a loan.” That attracts them, but what are they trying to achieve? Are they doing works? Is the intention to hold long term, or sell quickly and make a profit? That’s more critical than a shiny rate or new product.

What does a good broker actually do before submitting a case?

Priya Kainth03:48

Check everything for compliance and anti-money laundering, meet the client, get a full understanding and have the compliance documents completed: fact-finds, data protection, treating customers fairly and so on.

Firstly, we meet the client and understand the case. We send the documents they need to complete, then go through them to understand their requirements. Based on what we know, we make suggestions: “Would this work better long term? Have you thought of this?”

Together with the client, we map how to move forward and what’s required. Then we approach lenders to see who fits best in terms of product, rate and fees, for the client as an individual or business. We start talking to lenders and submitting cases. It’s a process.

Alastair Hoyne05:08

Some investors think the broker is a shopping comparison site. They don’t realise how much work goes into understanding the client’s needs. A broker’s value, especially yours at Abode Finance, isn’t just access to products or lenders. Knowing what exists helps, but it’s the diagnosis, structuring, presentation and, probably most importantly, expectation management.

We’ve both had borrowers take three weeks to get the paperwork, then send it and say, “Are we ready to go now?” We’ve been waiting all this time, and suddenly they expect completion yesterday.

Priya Kainth06:00

Sometimes they send bits they think are important. You ask for six months’ payslips and bank statements, and they ask why you need bank statements. We need to marry up the rent or employment income with payslips or the last two years’ accounts, so we can see a pattern.

People sometimes lack understanding of the process and why we need things. It’s not because we’re nosy or want to know where they shop. We need to know affordability, capabilities, whether they have good or bad credit, the risk and their boundaries.

We don’t want to give someone £1 million when they can only afford half a million. You’re wasting the lender’s time and my time, and living in a pipe dream. Those crucial conversations are key.

Alastair Hoyne07:15

They really are. Investors need to understand that a broker provides a consultative service. It’s not just finding the best blended rate, and we can talk later about blended versus headline rates. It’s being able to say, “I don’t think this is a good deal. You should walk away.”

If the wind blows the wrong way, you could be in negative equity. If the works don’t increase the rent enough to cover the mortgage at the appropriate level, you might face default or worse.

In my own broking career, a client came to me with an HMO in Coventry, if I remember correctly, doing a high-end refurbishment for hospital staff and contract workers. I said the yield looked fantastic, but I didn’t think the property value would increase enough to justify the work.

He said, “I don’t care, Alastair. I want to go ahead. Get me the loan.” I said, “If you plan to back a losing horse, I will not support you.” He got frustrated and angry and hung up. A week later his wife called, crying, saying, “Thank you for not letting him do that deal.”

Priya Kainth08:48

Eventually they come back because they realise you’re not killing their dreams; you’re protecting them. That’s what a good broker and lender does. It’s not about lining their pockets. I’m very against that, and I know you follow the same principle.

But there are people who want to line their pockets and push a deal through whatever it takes. It’s not practical for the client and it’s not ethical.

I’m dealing with a lovely client who was, in my opinion, mis-sold a bridging loan two years ago. A year later, the same broker doubled her debt with another bridging loan. She initially owed nothing on her property and now owes just under £600,000. That’s a lot of money in two years, with no accountability for where it’s gone apart from fees and debt.

I know how it happened, but don’t understand why anyone let it happen. We’re untangling it and doing what we can to reduce the loan. We’re looking for a regulated mortgage over the next 15, 16, 18 or 20 years, whatever we can get, to reduce the interest rate. There are also overpayments, I think roughly 10% a year, which we’ve decided to do.

That’s another thing I do, beyond the mortgage: suggest ways to make life easier, and hold your hand for as long as needed, through mentoring and making sure you don’t get into a financial pickle. It’s easy to do. Incorrect advice can leave a situation taking years to untangle. With the economy as it is, negative equity is there for a lot of people.

Alastair Hoyne11:36

We cover this extensively in the book. It’s all well and good getting 75% loan-to-value on a discounted property or uplifted value, such as a title split, potentially giving you 100% net loan-to-purchase-price.

But if you don’t get the yield up and you’re already at 75%, with the buy-to-let also at 75%, hopefully you’ve considered listing it for sale at the same time. Otherwise, although you may have put in little cash beyond SDLT and entry costs because there was no deposit, you might have to put money in just to remortgage. You haven’t structured the transaction practically or taken your broker’s guidance to ensure you can exit safely.

It’s like credit cards. It’s easy to apply, although in our world we ask for more documentation. Suddenly you’re only paying the minimum, then owe twice what you borrowed. Did you really need that new TV?

Priya Kainth12:52

Exactly. You and I could speak all day. What I’m seeing is high-net-worth and ultra-high-net-worth people on a slippery slope, losing everything because they’ve mortgaged themselves up to the hilt.

With property prices coming down and valuations reduced by about 15% or 20% at the moment, having maxed out at 75% loan-to-value, the equity isn’t there when they refinance. There’s no window. They have to put money in, which they say they haven’t got.

As a result, things are going into liquidation and administration. Clients have been bankrupt and come out of bankruptcy, and then it’s difficult finding lenders because they’ve defaulted and have that history. Lenders don’t want to touch them. It’s messy and a scary time for lenders, brokers and clients.

Alastair Hoyne14:17

When reviewing assets and liabilities statements, portfolio sizes and loan-to-equity, you see a net-worth number. As a lender, we normally look for 33% of the gross loan as net-worth cover. That net worth can be a hopeful or imagined equity position in a portfolio.

Even if it’s legitimate, which we often have to take on faith because we don’t necessarily value a portfolio we’re not securing against, it’s paper equity. It’s asset-rich, cash-poor.

People are thrilled to meet the criteria, say that 33% requirement, but forget that property isn’t liquid wealth. If a bill arrives, they need to refinance quickly, or a family event means they need cash, it’s not quick to arrange a second charge or further advance, or hope the senior lender allows another charge.

Sales take a long time. I bought my house in cash and it still took nine months. It’s not just financing delays; the whole process is slow. That brings me to the next question: can you give an example of an enquiry you wish had arrived earlier, where the client was already deep into a deal and the finance conversation started too late?

Priya Kainth16:19

Firstly, the enquiry I like is the one that pays best, but they don’t always do that!

It’s clients getting into a pickle, who have gone around the houses, or haven’t, and didn’t heed advice from 18 months or two years ago. It’s like the Titanic seeing the iceberg: instead of steering away, you hit it.

I’ve suggested something and, for whatever reason, clients choose not to take the advice. Six or 18 months later they return: “My situation’s worse. I’ve done nothing. What can you do?” I’m sorry, but that ship has sailed. The lender willing to lend then means starting from scratch now. The market’s different. Something valued at a million could now be valued at 800 or 850, with that drop in equity. I can’t give you the previous deal.

I’m not saying I’m the oracle. But listen to advisers, especially on a slippery slope. Those are the cases I wish we could catch in time, with advice taken before they get into difficulty. We can try to save them, but it’s less hopeful after time passes and they have nothing to put into the deal.

Lenders see the situation from paperwork, statements and background searches. They want the client to put something in. Instead of 75%, they may lend 65% or 70%. The window gets smaller.

The lady I mentioned has been offered another bridging loan by her current lender. If she takes it, that adds £50,000 to her debt, taking it to around £630,000. Her income can’t cover a normal mortgage at that level. We’re on the back foot before fees.

We need to speak to the current lender to make sure the three- or four-month extension is affordable now and allows her to get off bridging and onto residential finance later. Thankfully we’ve caught this one early enough, but we aren’t always that lucky. Those are the deals I want to catch.

Alastair Hoyne20:07

This goes back to broker ethics. I see cases with an engaged broker during the bridging stage, but, when repayment approaches, the borrower calls in panic because the broker isn’t responding. They have only a few months left and haven’t started the mortgage application. Then the lender worries.

That’s why we like working with good brokers such as you, to whom we can refer clients for help. Ethical broking means making time before an offer, guiding them on available finance, qualification and what they need to prepare for a structured process.

They need ongoing support, not just to exit on time or early and save interest, but keeping records. If they take a two- or five-year fix, remind them to refinance, because moving onto the standard variable rate increases costs. It’s being responsible, almost a management consultant and PA together.

Priya Kainth21:42

I don’t think getting a loan means the job’s finished. Once we get the bridge, we have a duty, in my opinion, to make the transition smooth in six or 12 months, whatever the term.

The day a bridging loan is accepted, or the next day, I start looking at the exit. How long is a piece of string? Your cash purchase took nine months. If I don’t start on day one, I’m doing neither my bridging lender nor the client any favours. You’re left with a hot potato, and the client is frightened.

If we get the exit, by sale or refinance, sooner, you’re happy because you’ve got your money back, and the client is happy because they’ve got interest back. It’s smoother. Waiting until the last minute creates unnecessary stress.

We can potentially go slower without that rush, but there’s still pressure to get the ball rolling because the market moves. We don’t want lender letters saying the loan must be repaid, or clients stressed that I’ve put them in a pickle. That transition from start to finish is crucial.

Alastair Hoyne23:48

The takeaway is that timing is part of the structure. Leaving finance until after offer acceptance can turn a strategic decision into an emergency. Check borrowing before offering. It helps decide the offer level based on an affordable deposit.

There’s also loyalty. If someone like Priya has consulted, guided you through pros and cons, arranged short-term finance and then the mortgage, stick with them. Look after the person looking after you. Different fees, or charging versus not charging, don’t necessarily measure quality. But if someone genuinely cares, respect that with loyalty.

Alastair Hoyne25:01

I’m enjoying this and keep wanting to ask more questions. What do borrowers underestimate about finance: timing, documentation, valuation reports or liquidity?

I love, “I’m buying through a limited company, why do you need my personal details?” Or, “I paid for the valuation, why won’t you give it to me?” Then there’s the LinkedIn favourite: you finish an application and the lender pulls the product to change the rate, so you start again, on the morning you’re going on holiday.

Priya Kainth25:47

Exactly. Client expectations. How long have you got? We love our clients. Some are testing, some delightful. Some overshare every piece of paper with their name on it, which is brilliant, but time-consuming to sift through.

Others say, “My property’s worth X, I earn Y, there’s ample equity. Get me a mortgage.” I ask for statements, ID and the list. “Why? You know my name and address, and there’s equity.”

Alastair Hoyne26:43

And I have special skills I can deploy.

Priya Kainth26:49

I put on my calm, patient head and reverse it: “I want a million pounds. I earn X, and you know my address and name.” They say, “Don’t be ridiculous, why should I lend you that? I know nothing about you.” Thank you. Neither do the lenders, who may never speak to you before the mortgage starts. Why should they give you their money?

Sometimes we role-play or play devil’s advocate so they understand why information matters. They can be reluctant to share, like getting blood out of a stone, but it’s part of the process and we enjoy it.

People don’t even want to share with siblings, spouses or partners. One client buying with a partner might say, “Don’t show them my bank statements. I have £50,000 but want them to think I have £20,000.” I won’t share it. Meanwhile, the other has £18,000 and is borrowing another £2,000 to contribute £20,000. You’re thinking that lending the £2,000 would bridge the gap.

It’s not nosiness. We need the whole picture to structure the lending and approach the right lenders, whether high street, specialists, family offices or high-net-worth private lenders. They might have a CCJ, which we must explain in a report about why a particular lender should consider the case despite adverse credit.

Alastair Hoyne29:35

Suitability checks.

Priya Kainth29:39

Yes. Credit reports are key, although people are reluctant to share them. They tell us a lot. People forget a loan they took out 20 years ago, but it’s relevant to affordability.

Alastair Hoyne30:02

You often help them discover a parking fine they didn’t know about, and a CCJ against their name. At least they can solve it, challenge it if appropriate or ask for it to be set aside.

Setting expectations and telling investors what they need to provide to be considered and hopefully accepted isn’t pessimism. It reduces their stress, the broker’s stress and poor decisions.

Priya Kainth30:44

Without knowing the situation, you’re submitting applications for the sake of it, which helps nobody. A soft search doesn’t affect a credit report much, but a full application involves a hard search.

There’s no point approaching a lender if I know it won’t accept CCJs or a CIFAS marker. I’m wasting the lender’s, client’s and my time. Knowing the history, collecting and reviewing documents, understanding the requirements, then approaching lenders suited to the client is key.

That comes with experience. With CCJs or adverse credit, you go to lenders that accept that. No point going to the high street, for example.

Alastair Hoyne31:55

Often, where there are CCJs, a lender requires them paid from the proceeds, so at least it helps get them back on the straight and narrow.

Alastair Hoyne32:08

That leads to price: the shiny rate or new cheaper product. You see NatWest drop its rate, then everyone else follows. But those are headline rates.

I talk about the blended rate, the true cost of capital, taking account of arrangement, exit, broker, admin, documentation, valuation and legal fees. Lenders present information differently. Sometimes you deduct fees from the gross loan and the net doesn’t quite reconcile. You almost need algebra to find missing fees.

How do you steer clients away from simply selecting the cheapest rate? There’s best rate, best leverage at a potentially higher rate, or a blended option between them. There’s also execution: knowing the terms offered upfront will be the terms you get, without changing rates or goalposts. How do you explain choosing a lender pragmatically for what they’re doing?

Priya Kainth33:48

A rate is only one part of the transaction. Look at finance costs over the term, arrangement fees, exit fees, early repayment charges, valuation and legal costs and, most importantly, my costs. Loan-to-value also matters.

I have a client doing a buy-to-let at around 40% loan-to-value. A lot of lenders don’t do 40%; they’ll do a minimum of 60%, for example. We can use a high-street lender because the client’s clean, with no hidden agenda.

Over the weekend they sent rates from Google, but those were residential rates for a buy-to-let mortgage. I explained that distinction and showed around six high-street lenders. I made a video of my sourcing process to show why this product came up.

Although it had a 3% product fee, the maths made it cheaper when factoring in arrangement and exit fees, early redemption charges, loan-to-value and the whole list. I made a table, using AI to make it look nice, then put it on a spreadsheet: the loan, lender and cost.

That visual work helped them see why, although another lender’s rate was better, it would cost around £9,000 or £10,000 more over the term. This morning they approved my recommendation: slightly higher rate, but better long term. It’s a no-brainer, and they want to make the payments. That helps.

Alastair Hoyne36:47

You can do this exercise using the exact same lender. It might have a product with one annual rate and a 3% product fee. Disregarding early repayment charges, it might offer another at 5.6% annually with a £1,500 product fee, then a third option.

Compare those three products, adding the gross loan over, say, 20 years, and splitting it into a two- or five-year period. You might find the one looking more expensive upfront is cheaper over the longer run.

Priya Kainth37:39

Yes. Clients look at the rate without factoring in the product fee, which makes a big difference to actual cost. Explaining that there’s more to it than what you first see makes sense to them.

A five- or ten-minute call explaining what we did, how we reached the conclusion and why we recommend it makes the penny drop. Then we’re on our way to getting the deal across the table.

Alastair Hoyne38:35

We haven’t got much longer, everyone. You might be happy, or want another Priya–Alastair conversation. We sometimes WhatsApp until 11 at night and can’t remember why we started talking.

This may be self-serving, but what do you like in a lender? Some take two days to respond with terms, then it feels like talking to a robot. For lenders watching, how can they improve the relationship and see more business?

Priya Kainth39:19

Communication and honesty. I love working with you because you tell me within ten minutes whether it’s a no-go or we’re good to go. We aren’t waiting 24 or 48 hours, or a week. If it works, we do it. If not, I know and look elsewhere.

Not everyone can answer within ten minutes, but don’t leave me hanging. Tell me as soon as you can. That communication, honesty and full transparency are key: I’m transparent about the client and hide nothing; you’re transparent about what you need and why a deal works or doesn’t.

If I give you X, you might suggest a structure and questions to ask the client. I might provide information relevant to a broker but not know everything a lender needs. Understanding your appetite and what works helps us get the deal over the line, whether with high-street, specialist or private lenders.

Alastair Hoyne41:25

Lenders can add value by finding ways to improve a deal. It might improve liquidity and exit for the lender, while sharing knowledge with the broker, who shares it with the borrower. The broker gains credibility, learns and probably brings the next deal straight to you. Be open and transparent.

People picture the BDM as optimistic, wanting the deal at all costs, and underwriting as the opposite. I joke it’s like immigration, trying to find a reason to say no. We need balance: a realistic and transparent BDM, and an underwriter who understands risks but works out how it could be done.

Risks can sometimes be mitigated with insurance or special solicitor undertakings. It’s not solving everything, because risk needs careful management, but being pragmatic in finding a way through.

Alastair Hoyne42:41

Let’s finish with the clients and mortgage work you most enjoy. Tell us about Abode Finance and your experience. You’re fully regulated, unlike brokers who may be unregulated or have limited credit permissions. You can help with homes, buy-to-let, bridging, development, even buildings that seem to float over water.

Priya Kainth43:14

I do regulated and unregulated work: commercial, semi-commercial, bridging, development and land with planning. Pretty much anything property and finance.

I also mentor, which matters because you don’t want people in sticky situations. I’ve started next-generation stewardship and succession planning. The world’s changing; people don’t have nine-to-five jobs any more. Long-term broker relationships and understanding what matters are important.

I enjoy clients who want that relationship, because I understand their finances, direction, needs and what does or doesn’t work. They may think they need a £50,000 loan, but when you dig into it, they may not.

I love challenging cases. Sometimes the more complex, the more of a buzz I get. Solving something outside the box feels rewarding. Simple cases are great for earning money, but when I want a challenge and focus, complex and difficult is what I enjoy.

I’m an all-rounder. I don’t like saying no unless I really can’t do it. Nine times out of ten, or actually 99% of the time, I do the cases myself. I rarely pass them to other brokers or packagers, because I like getting my teeth into things and giving my best.

Alastair Hoyne45:53

Brilliant. Get in touch with Priya about finance for your home or next investment. Brokers who can’t handle regulated transactions can discuss co-broking or introducing. Lenders know what she likes: communicate, be pragmatic and work with a fantastic broker.

The point to leave with is that good broking starts before product selection. Understand the objective, asset, borrower, cash position and exit, and the product search becomes more intelligent. That’s a big part of The Finanze Framework and why I wanted Priya on The Property Escalator.

Thank you for your time. I hope you’ve enjoyed it. We’ll share Priya’s contact details in the summary or comments on whichever platform you’re watching. Thank you, Priya.

Priya Kainth47:04

Thank you very much, Alastair. I really enjoyed it.