Completing your mortgage application could become as easy taking out car insurance by the end of the decade, an industry expert is predicting.
Advances in technology, particularly in systems being developed in financial services, will enable more borrowers to easily find mortgages to suit their needs, according to Pete Mugleston of Online Mortgage Advisor.
And he thinks there are some ‘breakthroughs’ on the horizon which could mean people could eventually be approved for a mortgage in minutes.
He said, the past 10 years have brought huge changes in the way people obtain mortgages. Up until 2012, he said, most mortgages were taken out directly from a bank or building society.
But skip ahead a few years, and 60% of loans were taken out via brokers.
Online brokers
Indeed, in the last few years the industry has seen the rise of online brokers which enable customers to apply online, speaking to someone in person only if they require extra advice or reassurance.
What’s more, organisations such as HM Land Registry have launched a digital mortgage process to help speed up the process of buying a home.
Then there is the rise of open banking, which many experts are predicting could revolutionise the mortgage process by cutting out the need, for example, to dig out bank statements and other documents.
Mugleston said: “We are on the verge of some real breakthroughs.” He added: “I can see, in another 10 years, the mortgage application being as simple as car insurance for many borrowers.”
Getting approved for a mortgage
Borrowing has become more difficult in the last decade because, as a result of the financial crisis, lenders have been forced to impose stricter tests on potential customers.
Mugleston continues: “Today, getting an appointment with the bank is tough and brokers are handling the majority of applications.
“The Mortgage Market Review [MMR] has tightened regulation, and further ensured borrowers are creditworthy and able to afford their loans.
“As a result, many have found it more difficult to be approved. That said, there are many lenders available for those with all sorts of needs and, whilst finding a deal can be tough, there are mortgages there if you know where to look.”
