Building a community of mortgages

Inside, it immediately becomes a place where people can talk. When I called in to meet Chris Brown, Director of Products and Marketing, the reception area was busy with people with every sort of query, but sharing one request – can you help?

One of the things the Society is most proud of, that underpins its whole philosophy, is that the answer to that question is almost always yes. The range of mortgages they offer and the rapid response to changing economic circumstances either for Chancellors in Downing Street or families in Eldon Street gives Darlington Building Society the flexibility their larger rivals struggle to match.

Chris is rightly confident about the tools his team have to fix what can seem like an insurmountable problem for mums, dads and young people who only want to provide for and shelter their families. The team here are constantly assessing the market and the challenges each of their members might face.

'We are seeing more first time buyers coming to us' - Chris Brown (Image: Stuart Boulton)

In front of a wall-sized image from generations ago of High Row and the building we are now in, Chris tells me: “From a market perspective, it was relatively quiet at the end of 2023 and the start of 2024, but I think we are starting to see the market pick up and we are seeing more first time buyers coming to us and more people taking out residential and specialist mortgages.

“There has been a bit of an affordability issue that is constraining some people, with a fixed rate at the back of the last year or so around 6.5% for some mortgages. That is quite a stretch for people, but we have seen rates soften and the markets coming back to us. An Issue remains with supply and demand, with the availability of new properties making it quite hard for people to get onto the property ladder.

“So we have moved to tackle that with some innovation in the market, which is really trying to support those members.

“We launched our ‘Help to Build’ mortgage which doesn't necessarily directly impact first-time buyers, but does support the supply of new properties which drives down the cost brought about by too many people chasing too few properties. Boosting the number of new homes is key to helping more first-time buyers.

“We also know people are pausing to see what happens to rates, which is a big factor in the market as rates come down to a more affordable level. As rates stabilise people gain confidence in taking out a mortgage.”

'Young professionals deserve their chance of homeownership' (Image: Stuart Boulton)

There is a lot of psychology in mortgage lending. It is such a huge step that the way people perceive markets and their own limitations can play as much a part in a branch conversation as the actual offer on the table. Chris has chosen his team carefully, so they are driven by finding a way rather than ticking a box. They know they can help and their confidence – based on their own experience and the range of offers available - passes right across the room to the member facing them.

It’s about what feels right, says Chris: “We lend up to 95% for first-time buyers, which is fairly mainstream as it means many young families only need a 5% deposit to move ahead. I think that feels ethically right because you need to be able to put something into the property and from our perspective it is important that you own something in that first home.

“We also know there are lots of young workers out there, in our region and beyond, so we've built a Young Professionals mortgage which enables people to borrow an amount based on their career expectations and potential, up to six times their income rather than the standard 4.5. This opens up their options supports a healthy mortgage market.

“Strict affordability criteria and the individual underwriting of more complex cases supports our duty as a responsible lender. Our Young Professionals mortgage in particular is about assuming that –as nurses, doctors or accountants – they are on a pathway and we feel we can give them an opportunity to get onto that property ladder in a home suitable to their needs, budget and lifestyle.”

Visa mortgages are another route forward that the Society offers as it helps challenge the misconception that people working here from abroad won’t qualify for a mortgage.

“Thanks to technology advancements combined with our manual underwriting processes, we can be a specialist lender, unlike other High Street organisations,” says Chris.

“There are some really good young professionals that deserve their chance of homeownership – and it’s so sensible when we can help our local community through places like the Darlington Economic Campus, which is bringing in a lot of people with different skills who need to have their eyes opened to the opportunities being presented to them.

“They are in danger of becoming a  generation of renters, but we can enable them to stay in this country with the property they want and with a good job. It’s a growing area and we have a good following, which we are proud of because we are all about looking and understanding every individual case. They aren’t numbers on a form - they are people and families.”

To proactively support homeownership and those working in the local community, the Society has been working on a pilot project with Woodlands Hospital in Darlington, part of the Circle Health Group.

Collaborating with such large employers makes perfect sense. It’s tricky to pin down what a Darlington Building Society member looks like, but these mortgage clinics offer the chance of a fairly accurate cross-section.

It also means conversations about personal finance can start with younger staff, in the supportive environment of the place where they earn the money that will one day help pay for their first home. For some, this might be the first time they have looked seriously at their future plans since lockdown.

The Society launched a mortgage clinic at the hospital to answer all of its employees mortgage questions. They will often work shifts and are therefore unlikely to easily find the time to visit a mortgage advisor in person, the mortgage advisors came to them. Darlington Building Society’s mortgage advisors set up for the day at the hospital with 30-minute bookable sessions answering a wide range of questions.

With the Woodlands Hospital on the doorstep of their head offices, Darlington Building Society reached out to see how they could work together to help enrich their respective colleagues’ wellbeing and lifestyles. Supporting a range of mortgage journeys, the partnership is helping people to put down roots in our region and enabling young professionals take their first step onto the property ladder.

Chris told us: “Our mortgage advisors loved their day at Woodlands Hospital. The purpose of the mortgage clinics isn’t to onboard a raft of mortgage members, but to extend our knowledge and support to those in our region.

“Post-covid, people are still missing that face-to-face interaction, and we want to kick-start that human touch for mortgages again. Whether initial questions about saving for a mortgage, taking the first step onto the property ladder, or moving up it, people felt the benefit from having shared their questions with an expert and getting a head start on their next steps to make their home ownership dreams a reality.

“That kind of wellbeing support through sharing our knowledge forms a part of our community impact strategy and it was great to see. Colleagues at the Society equally enjoyed their session with the Woodlands physiotherapy department, which was held at our head office to impart their knowledge for better physical and overall wellbeing.

“These partnerships are important, and their benefits reach far and wide across our organisations and into the local community. By sharing what we’re good at, we can help people from all walks of life in improving their wellbeing and supporting their home ownership journey.”

 Mark Pinsent, Sales and Marketing Manager of Woodlands Hospital said: “As neighbouring organisations, it seemed the ideal opportunity because we could see the Society shared our passion for a partnership that delivered mutual benefits.

“The mortgage advice session, delivered by the Society’s experts, proved a tremendous success with our employees who were very impressed with the friendly and relaxed way in which invaluable guidance was provided. Taking out a mortgage is one of the biggest steps people take in their lives, and it can be daunting, but our employees were put at ease from the beginning.

“The result is that the Society is now helping several members of Woodlands’ staff to get onto the property ladder. At the same time, we are supporting the Society’s staff with occupational health services. It is a partnership that has quickly proved to be successful and we look forward to finding new ways to support each other.”

Whatever the audience, the mission remains the same - find the solution and help build a generation of people wanting to stay in a good home and good jobs.

The benefit of having both of those things in place is huge, with the sense of achievement boosting mental and physical health. When people feel that they're on a secure financial footing and have a plan going forward, it's good for their general health and wellbeing because they start to realise their hard work has achieved something.

Staff at Darlington Building Society who have these discussions know they are life-changing.

Chris tells me: “I think if people feel secure about their financial future, and know what their monthly payment is going to be – that’s a really important stage to get to and we can get them there and then stay with them as their needs might change. Sometimes that will mean getting married, starting a family or buying a bigger house but some other events perhaps aren't as positive, like redundancy or illness.

“We're really passionate about supporting those members who may be going through changes in their lives, through a dedicated team who can talk about different options. This has never been about getting the money back at any cost – it’s about working in partnership with an individual and finding a way to get them back to a position where they have breathing space.

“We were one of the first people to sign up to the Mortgage Charter, which is an FCA initiative, and I think it's really good that we've seen usage of that in a positive way as we try to keep people in homes as long as possible with things like payment holidays and temporary interest-only offers – honest and carefully constructed packages which enable people to feel more secure about their financial future.

“We won’t leave anyone high and dry – which I think goes back to the sole purpose of what we were in 1856 when we were formed as a mutual.

“The Society’s team then decided to enable people to purchase their own property and that's what we're still doing now. Sometimes it's difficult to compete against the bigger players but we can really support people where the market sometimes won't, and I think that's a real niche of ours that is bringing people into our offices.

“The word I always use is that we are very personable – we’re person driven and not process or system driven. We say no to ‘computer says no’ because we know each mortgage is as individual as the person applying, and we take the time to look for reasons to responsibly say ‘yes’. We're listening, we'll have a personal conversation, understand the demands and needs of that individual, and we'll try and make it work in a responsible and comfortable way.”

THE FIRST STEPS

Advice

A qualified mortgage advisor will help you to understand the options specific to your circumstances. Whether it’s how much to save to get the property of your dreams, or what kinds of mortgages are available to you. Perhaps you’re further into your journey and you’d like to know about remortgage options, buy-to-let or other specialist mortgages, the best place to start is by speaking to an expert. Darlington Building Society has a team of mortgage advisors waiting to answer your questions. You can book a free slot via the Society’s website, just go to: bit.ly/darlingtonmortgages

A Decision in Principle (DIP)

A DIP simply confirms how much a lender would be prepared to lend to you.  This often can form part of the conversation with a mortgage advisor. Sometimes, an estate agent may ask to see your DIP before they will let you view or accept your offer on a property.

The mortgage application

Once you have your Decision in Principle and you’ve had an offer accepted on a property, you’re ready to progress to a full mortgage application.

This is where you’ll be asked for additional information on who is buying the property, and the property itself. You will also know at this point the specific mortgage you would like (for example this could be a 2 Year fixed mortgage at 90% LTV) – this is based on what you can borrow.

As soon as your application has been assessed, a valuation on the property is carried out, and all relevant documents are received we can make you a formal mortgage offer. Once you have your offer, this is valid for 6 months.

The mortgage offer

If we accept your mortgage application, we will send you a mortgage offer, which includes details of the mortgage we will provide, any amounts and charges added to the mortgage, the mortgage term, and the conditions of the offer. It will also include your monthly repayment figure. The mortgage offer is an important document, which you must read carefully.

The technical terms

APRC stands for annual percentage rate of charge. It shows you, as a percentage, the annual cost of a mortgage. It can also be termed as the ‘overall cost for comparison’. Some mortgages offer a lower rate of interest for the first few years, and the way the APRC is calculated reflects this. It brings together all charges (such as mortgage and account fees), calculated as if you kept your secured loan or mortgage for the full term without changing it. APRC is designed to help show potential borrowers the impact that the different rates and any charges could have over the lifetime of the mortgage.

SVR stands for standard variable rate, and is the interest rate that will be charged once an initial term on a fixed rate mortgage ends. For example, if you initially take out a 2-year fixed rate mortgage and at the end of the 2 years you do not move onto another mortgage, you will automatically ‘roll over’ onto an SVR . We contact all of our mortgage members 3 months before their deal is coming to an end, to give you the chance to decide which option is best for them.

Don’t forget the fees

There are several fees to be aware of when taking out a mortgage. Some mortgages have an account fee (the amount charged for setting up your mortgage) and a product fee (the amount charged for the mortgage itself, which can be added to the to the mortgage amount in some cases).

Talk to us

Phone 01325 741035 or email mortgagedirect@darlington.co.uk