For most of us, taking out a mortgage to buy a house will the biggest and most important financial transaction we ever make. So it’s surprising that, even in this day and age, the whole process can seem clumsy and frustratingly slow.
Despite all the technology now available to us, getting a mortgage is still done by letters and phone. But the industry is slowly coming round to the benefits of new technology, with various apps and online services growing in popularity and functionality – meaning prospective homeowners may soon be able to get a mortgage online.
With consumers becoming more online-savvy, the banking industry as a whole is waking up to the prospect of providing intuitive online services. In terms of mortgages, there are now a lot of online mortgage brokerages that are working on automating the application process for customers – some even using Artificial Intelligence and machine learning to recommend mortgage products.
There is also work ongoing to help synchronise and integrate all the different ‘moving parts’ of a mortgage application. Rather than having to submit paper copies of bank statements and payslips to your lender, who then uses a credit rating agency to get a credit report etc… the whole process between brokers, lenders and solicitors can be managed with one online dashboard.
Another area that would benefit borrowers is the technology that would allow them to apply online and then receive offers from a number of different lenders. Unlike current comparison websites, which simply list the ‘bare bones’ of each mortgage (e.g. APR, rate, lending fee etc…), this would actually use the details input by borrowers to recommend mortgages they are actually eligible for – and which ones represent the best deal for their personal circumstances.
Online mortgage brokers
Below we take a look at some of the more forward-thinking mortgage apps that have launched in the past year, and what each of them can offer prospective borrowers…
Trussle was launched in December 2015, which makes it the first online mortgage broker in the UK.
Trussle’s main benefits is that it is ‘Quick, honest and fee free’ – simply fill in your profile and it will recommend what it thinks is the best mortgage for you.
It uses its own algorithm and actual humans to assess your personal data and answer the big three mortgage questions: What mortgage can you afford? Which type of mortgage is right for you? When is the best time for you to switch mortgages?
Trussle will search through over 11,000 different mortgage products from 90 individual lenders in real time, giving you a quick decision on the most suitable deal for you.
The Trussle service is entirely online, although everything is reviewed and qualified by their in-house mortgage advisers before being approved.
It offers borrowers all the benefits of AI e.g. large amounts of complex data being processed and compared quickly and accurately using a range of suitability, affordability and lending criteria, but it still relies on human intervention to get mortgage applications over the finish line.
Habito was founded in April 2016 by Daniel Hegarty, the former head of decision science at payday lender Wonga, who went through the process of getting a mortgage and was surprised at how difficult and clunky it was.
Habito takes the easy interaction that the internet offers by using an automated chat bot to give customers bespoke mortgage advice based on the information they input.
It uses artificial intelligence to explore all the relevant aspects of your financial life e.g. employment situation, your spending habits, life plans, investments and so on. It will then use real-time mortgage rates to work out an initial monthly mortgage repayment that you can afford.
When you are done going through the chat bot process, Habito will recommend its preferred lender and mortgage product for you.
This can be done online either via desktop or laptop, or on your mobile device. You will then be put in touch with a mortgage adviser over the phone to double-check everything before sending the full mortgage details on email.
All the document handling is done via the chat bot, so you can upload your bank statements, wage slips etc… while you chat.
Currently Habito isn’t able to fully automate the process of applying for the mortgages it recommends, due to the different formats and requirements of the different lenders – so what you receive back from Habito isn’t an official ‘mortgage offer’. However, they will soon roll out its real-time mortgage approval system to provide an actual agreement in principle from the lender.
A relative newcomer, Dwell was launched in January 2017 with the aim of making mortgages easier for people who are fed up of having to take time off work or wait for weekends to meet up with advisers face-to-face.
Users have to fill out a comprehensive form asking for detailed personal information including employment status, income sources, financial commitments and products (credit cards, pensions etc…) savings, financial dependents, spending habits and so on.
This whole process should take around 10-12 minutes, as long as you have all the requested information to hand.
Dwell will then use this information to search for the top three mortgage products that are most suitable for you.
You can upload documents direct to their custom built system, and following the initial decision you can schedule a telephone call or WhatsApp conversation with an in-house adviser.