"It’s infuriating that customers are feeling so stressed because of protracted, delayed journeys with mortgage lenders, and that has a tangible knock on effect on brokers too."
Speak to mortgage brokers, and one of the most common frustrations you’ll hear from them is over the speed of mortgage lenders.
They have clients who have found a great property, are a great fit for a mortgage, yet the mortgage lender’s processes mean that actually getting a decision, let alone access to the funds, seems to take an age.
As well as the obvious irritation this sparks, there’s a financial impact too - the slower a case takes to reach completion, the longer the broker has to wait to actually be paid for their work.
Speed in action
We had a case recently which demonstrated just how powerful it can be for lenders to take a different approach and instead focus their efforts on delivering truly rapid turnaround times.
A broker came to us, Atom Bank, at the end of their tether, having grown increasingly frustrated with the length of time it was taking to get a decision from one of the ‘Big 6’ high street lenders. Given they were an existing customer the broker thought that this existing relationship meant the application would go through smoothly.
The reality was the polar opposite. Instead, they were left waiting for an offer three months after having submitted the application. It seems that the mix of employed and self-employed income for the borrower presented a hurdle the lender was struggling to overcome, but meant the borrower was at their wit’s end, facing a pressing deadline to complete their planned purchase.
Thankfully, once the broker brought the case to Atom Bank, the experience was much more positive, as we were able to proceed from the Decision in Principle and application to completion in just five working days.
That’s an extraordinary turnaround at the best of times, let alone when the borrower was up against it and had suffered through a protracted process with a different bank.
A painful process
Unfortunately, this particular client is far from alone in wanting to tear their hair out over a tortuous experience with a mortgage lender.
A study by fintech firm Ohpen last year provided some colourful insights into just how painful plenty of borrowers found the process.
The research found that almost half of applicants associated the process of obtaining a mortgage with anxiety, with over a tenth (13%) stating they’d rather be trapped in a lift for 12 hours than go through it again, while one in six said they’d prefer to be subject to four hours of roadworks.
As amusing as it can be to compare the various aspects of life with which is most frustrating, there’s an important point here. Buying a home is one of the most significant experiences any of us go through - certainly one of the most expensive - but the excitement of securing the keys to a new home can be completely eroded by just how painful an ordeal it becomes.
It really shouldn’t be like this.
What matters to brokers and borrowers
Across the bank we have spent a lot of time refining our processes, working closely with brokers to identify the potential pressure points which can lead to avoidable delays. That feedback is crucial - brokers know better than most where things can go wrong, but also the small tweaks that can make a sizeable impact.
That collaboration has been effective, and incredibly well received by brokers and borrowers alike, given Atom Bank’s status as the top rated bank on Trustpilot, as well as the fact that we have topped the bank category in Smart Money People’s Mortgage Lender Benchmark for three straight editions of the research. The fact that our median application-to-offer timeframe was reduced to just three days on average last year demonstrates how effective that work has been.
The need for speed
It seems clear to me that as an industry, we can - and should - go further to improve the speeds at which we work. It’s infuriating that customers are feeling so stressed because of protracted, delayed journeys with mortgage lenders, and that has a tangible knock on effect on brokers too.
It should be undeniable at this point that technology can do an enormous amount to help speed up those processes. We have seen first hand how greater use of automation where it makes sense can be incredibly effective, and I hope to see other lenders follow our lead.
A five-day mortgage is clearly something to be celebrated, but we need to get to the stage where it’s closer to the norm than the exception.
