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Will Arranging A Mortgage Become Easier?

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Will Arranging A Mortgage Become Easier?

It is understandable why many people find obtaining a mortgage to be a challenging process. Arranging a mortgage is one of the most significant commitments a person makes in their life, if not the biggest. Lenders must feel confident about the applicant and their ability to pay off the loan. Therefore, there is going to be an element of difficulty in obtaining a mortgage for many people.

However, there is an argument that the process of applying for a mortgage should be made simpler. The lender will still have to undertake tests and checks to ensure the applicant is suitable, but the applicant should find the application process less daunting.

Technological improvements help companies make decisions

The financial services market has welcomed advances in technology, allowing them to offer a better standard of service to clients and customers. By speeding up the application process, without compromising on the standard of vetting being carried out, the applicant should find the process less stressful. Also, a better application process may assist in pairing applicants up with the most suitable mortgage for their needs and budget.

The past decade has seen some significant changes in the mortgage sector. Until 2012, the vast majority of mortgages were arranged with a bank or a building society. However, even by 2014, figures reported in the Guardian suggested 60% of loans were arranged via a mortgage broker. The emergence of the internet and online applications is evident in the market and has reduced the level of human interaction required when applying for a mortgage.

There is less need for human interaction

Improving technology means the standard of communication and engagement provided by automated systems will provide more detailed and tailored information, further automating the mortgage process.

A recent study by technology company Iress, entitled the Mortgage Efficiency Survey, suggests more than half of the lenders who took part in the study expect APIs (application programming interfaces) to create the most “transformative efficiency gains” in the upcoming three to five years.

There have also been advances in the systems used by HM Land Registry. The digital mortgage process has helped speed up the home buying process, and of course, digital banking has significantly reduced the volume of paperwork people hold on to or use. These help in speeding up the application process, and enabling all parties to access data which allows them to make an informed decision regarding an application.

With the financial crisis and lenders looking to vet tenants thoroughly, it is perfectly acceptable for these organisations to undertake a robust vetting process. However, technological advances mean these checks can be carried out digitally. This should result in a faster process without any reduction in the quality of the vetting process.

Some industry professionals have suggested the mortgage application process will become like the process associated with arranging a car loan. This is a swift process which can be carried out online, with the application receiving notification of the decision in a short time-frame. This will help applicants to feel more confident in the process, and this could see more people enter the mortgage market.


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