Being rejected for a mortgage is bad enough. But when there is no information about why the credit check has failed, customers can feel confused and in the dark.
Now a new development by one mortgage lender, Gen H, could change this, allowing brokers to immediately see the problem and swiftly find alternative solutions for customers.
It’s all thanks to a new tool which shares with the broker discrepancies found during soft credit searches when a Decision in Principle is submitted.
It has been described as a ‘victory for common sense and a win for borrowers’ by one broker.
Meanwhile, Harps Garcha, director at Brooklyns Financial, speaking via the Newspage Agency said it was a mortgage market game-changer. “Increased transparency and better disclosure practices will cut down on delays and confusion in the mortgage process,” she said.
“If other lenders follow suit, it could make things smoother and quicker for the entire mortgage industry.”
Although this development is limited to one lender at the moment, the hope is more will follow, therefore making more credit searches transparent for customers.
At present, if customers fail credit checks with mainstream lenders, the mortgage broker is not told the reason. They then have to do a lot of digging to learn more and this can lead to costly delays, not to mention further stress for the customer.
Gen H’s tool will help streamline the application process.
Mike Staton, director at Staton Mortgages, also speaking to the Newspage Agency, said: “This is a victory for common sense and a win for borrowers. How on earth can lenders justify a fair outcome for borrowers if they can’t be bothered to tell them why they have declined their application?”
He added: “I have always struggled to understand why a lender would not disclose the reasons for an adverse credit decline, considering you have provided the lender with all of the required information to process the application and have a signed declaration agreeing to a credit check.”
