Target Group introduced the role of a Decision in Principle (DiP) which will “transform the mortgage application process”, shortening it from up to eight weeks down to just seconds for lenders who uses Target’s recently launched Mortgage Hub system.
Target has developed a way to provide accurate income, expenditure and property valuation information, at the beginning of the application process. This means that lenders can provide a DiP based on real rather than estimated information.
Until now, a DiP has usually been given by a lender based on estimated information, both on the value of a property and on what the potential homebuyer believes – or declares – to be their income and outgoings. Often at least one element of this proves to be inaccurate, which can delay the mortgage offer or make it unviable. Establishing this information can sometimes take weeks.
Target’s Mortgage Hub enables the broker to send their client a link to Open Banking permissions at the very first meeting while completing the FactFind. This will verify a client’s income and expenditure in seconds right at the beginning of the process so a lender will know whether the client can afford the mortgage they are applying for.
It will link to a lender’s automated valuation model (AVM) where this is available for a property. It won’t necessarily remove the need for a full valuation, but it will help speed up the process by providing a real value for a property, not one estimated by the borrower or an estate agent.
Each AVM will be matched to a lender’s risk threshold with a “certainty score” of how accurate the valuation is. Lenders have the facility to flag a valuation as to whether it can be approved or should be reviewed. This will all be done automatically, so will provide an answer within seconds.
This will inform the lender of the value of the property so they can see if it is line with their policy. It will also compare it to the client’s income information from Open Banking, so a lender will know right at the start of the process whether the client can afford the mortgage they are applying for.
It means an accurate decision can be made in seconds based on real information. In turn, the Decision in Principle that the lender provides is likely to be more accurate, reducing the likelihood of decline later in the application journey.
It also means that information only ever needs to be input once. Mortgage Hub links with other systems and platforms including panel managers, CRM systems, product and criteria sourcing systems. This integration avoids the need for brokers to input their client details multiple times, not only saving time but increasing accuracy and the level of compliance. Katie Pender, managing director at Target Group, said:
“We designed our Mortgage Hub and the DiP process around the people using it. We looked at what the challenges were and then built the Mortgage Hub to provide the solutions. What we have designed will dramatically shorten the time it takes to apply for a mortgage, achieve acceptance and successfully complete. Basing a DiP on accurate information that can be gathered in moments should be transformative, saving time for brokers, lenders and the end client.
We believe that our Mortgage Hub is the only mortgage originations system that has been built to be user-centric rather than product-centric. Together Mortgage Hub and our new DiP process benefit lenders, conveyancers, brokers, and ultimately the end borrower.”
