Are two-hour mortgage completions a good thing for the industry?

Paul Hunt is head of marketing at Platform

In an increasingly competitive market, speed of service is undoubtedly a critical differentiating factor bet-ween lenders. Instant mortgage offers are already being mooted and in many ways are a natural progression from the online decisions and applications that lenders such as ourselves are offering.

A highly frustrating part of the mortgage transaction for all parties is the post-offer stage and the time this can take. Title insurance has helped this process but it has not eliminated all the work involved.

Undoubtedly, the introduction of two-hour mortgage completions will prompt some in the industry to suggest that such a development will spell the end of the packaging community. Such a prognosis would be foolish, as was demonstrated after regulation.

Packagers are entrepreneurial enterprises which have adapted to change within the industry in the past and are quickly embracing and incorporating new technology into the offerings they provide to their brokers. Two-hour completions would simply mean that packagers would adapt again.

The possibility of two-hour completions being available as early as next year seems rather ambitious as it would require the other parties involved in completing mortgages, such as solicitors, to significantly enhance their service and embrace technological solutions before such a facility could be offered.

But such a development is not impossible, especially following the publication of the draft Legal Services Bill. And it would be welcomed by many in the industry as long as borrowers are given sufficient time to ensure they are making the correct decision. This may result in longer lead times between recommendations and applications.

Bob Sturges is director of communications at Money Partners

Lenders operating in the intermediary mortgage sector are at the forefront of developing online technology. As a result, the range of tools and applications has advanced considerably within a few years. The quest now is to deliver a seamless enquiry-to-completion solution.

The driving force behind this is competition, fuelled by the recent influx of new lenders. As products become indistinguishable the battleground is shifting to service, where speed and efficiency are important.

This benefits intermediaries and their clients, particularly in the specialist arena where people often need quick answers. In response, lenders are making great use of technology to deliver decisions and offers more or less instantly.

But there is a marked difference between a mortgage offer and completing a mortgage. Offers let brokers and clients move ahead with confidence while retaining the option to change their minds. A completion is more final and I question whether most clients need it to occur in just two hours. Moreover, does this afford them an opportunity to understand the nature of their commitment and could it put their adviser off looking at more suitable options?

Another point to consider is that two-hour completions won’t be achievable in most cases. The process is bound to rely on an automated valuation, successful electronic identity checks and trouble-free conveyancing. A hitch in any one will result in delays. Managing customer expectations springs to mind.

The industry is right to continue to innovate to make the process easier, cheaper and more efficient and two-hour mortgages may have their part to play. But gimmicks and the pursuit of headlines should be eschewed in favour of substance, responsible lending and the fair treatment of customers.