Online mortgage application portals have become a go-to tool for many brokers, but according to an adviser, brokers are still streets ahead of banks when it comes to simplifying the application process.
Online portals such as Onboardd have provided customers with a simpler way of handling the intense, paper-heavy process of applying for a mortgage. But banks do not yet have an interface to connect directly with brokers, which leaves banks trailing behind in the rapidly moving trend of digitisation.
Speaking to NZ Adviser, NewBuild Home Finance managing director Ian Webb says that New Zealand is still lagging behind such countries as the US, and this is partly due to the lack of an interface between advisers and banks.
“I started out as a mortgage broker in the States in 1991,” says Webb. “I could sit down with a customer and complete a loan application on my laptop- which actually had a printer inside it! I could upload the application and get a credit report which would provide a credit score, and then that would download all the liabilities onto the statement of position, and then we would upload that to the bank and provide an immediate pre-approval. And here we are 20 years later, and we’re still nowhere near that in New Zealand.”
“Brokers are also given a lot more discretion to understand how to put a deal together,” says Webb. “They’re given discretionary limits and are able to pre-approve clients themselves, so long as the client meets the required credit score. Here, you have to start with every client from scratch.”
According to Webb, there’s a long way to go before New Zealand can fully optimise the loan application process, and a lot of it comes down to the time consuming re-formatting required to submit an application to a bank.
“Online loan applications have opened up a bit of the bottleneck between the customer and the adviser, but it doesn’t open up the bottleneck all the way through to the lender,” says Webb.
“The lenders need to start understanding that there’s capacity here to have an interface where we can do our bit, and then present everything to the lender in a digital format without having to re-digitise everything. It would be really nice to try to encourage the banks to get their platforms in place.”
“Our own technology was new and we were told it couldn’t be done, but we did it. This technology should be promoted, but the banks also need to come to the party.”