Curran Affairs: Lenders feel the need for speed

Curran_Peter_Countrywide_2015

Customers are losing out on the expertise and knowledge of brokers when they opt for a 30-minute mortgage application

Managing our lives online brings enormous benefits, so it is no surprise lenders are using speed as their latest unique selling point. There are those that would rather focus on the ability to apply for and obtain a mortgage decision online within 30 minutes than on delivering expertise, advice and choice. So we should expect to see more of it.

But just because a customer can potentially get a mortgage quickly does not mean they should. This is not fast food we are selling here. Yes, there is an expectation from consumers that things should move quickly and that technology has a part to play – but we must be careful. The most important thing here is to get it right.

According to new research from Nottingham Building Society, a third of all housing transactions fail due to the mortgage not being in place. It is clear people need advice and expertise to guide them through the application process.

Even those customers with excellent credentials who sail through the online application process are losing out on ensuring they get the very best deal; this is something that can come only from speaking to a qualified broker.

Taking out a mortgage is one of the largest financial transactions anyone will make, so it is vital they get the best deal available. A broker will find out much more about the customer at the first point of contact and ask the necessary detailed questions that are impossible for an online fact-find to generate.

Trust and rapport

And it is not just about the right advice. It is also about being readily available to answer customers’ calls and establish trust and rapport. A good broker should also talk about the need for protection. Maybe I have missed it but I have not seen any mention of protection when looking at the adverts that promise a mortgage in 30 minutes.

Navigating the plethora of mortgage deals, rates, terms and lenders is a challenge for even the most savvy homebuyer or remortgage customer. However, an experienced broker will be able to quickly advise on the type of mortgage one might want to consider.

The biggest advantage for customers of working with a broker is having access to a wide range of the latest products on the market. This leads me to the expertise and knowledge. Lining up the right customers with the right lender is the holy grail of mortgage advice and a good broker will be able to suggest which lenders will be most likely to approve a customer’s application. The importance of expertise, knowledge, connections and technology cannot be underestimated. A customer does not want to damage their credit history by getting multiple applications rejected through trial and error.

Another benefit is that a broker will save customers time by comparing lenders and will be able to steer them away from those with complex payment terms often hidden within the contract. The experienced broker should make the mortgage application process a seamless experience.

This extends to their role in helping customers consider a range of additional products, such as life assurance, critical illness, income protection or home insurance. This contrasts sharply with the lender’s one-dimensional online product.

Brokers have been in competition with lenders for the past 20 years and this will no doubt continue to be the case for the next two decades. Competition is good for the customer but I believe the savvy ones will go beyond the instant gratification of a quick decision and look more closely at whether they are getting the right mortgage at the right price for their individual needs.

Peter Curran is managing director at Countrywide Financial Services