Service has been a prominent theme in the mortgage market in recent months, and with good reason. Lenders have needed to accommodate remote working and social distancing in their operations at the same time as customer demand has rocketed on the back of the stamp duty holiday and a renewed appetite for home moving. Indeed, in November 2020, official figures show that the number of transactions exceeded 100,000 for the first time since March 2016, which was before the Brexit referendum.
As a consequence, some lenders have taken longer to process applications, whilst others have managed to maintain good service throughout. But, in the context of the mortgage industry, what exactly is good lender service and how does it influence your recommendations?
The first and most obvious, response to this is speed. Whether it’s a purchase or remortgage, customers want things to move quickly and lengthy delays can lead to frustration. A number of factors contribute to how quickly a lender is able to make decisions, underwrite cases and process transactions.
Most important is the operational structure of the lender and whether it has the right people, processes and technology in place to work efficiently. All lenders are different in this regard and sometimes external factors can put a strain on a structure that is otherwise well-equipped. For example, a lender with a market-leading rate may receive a sudden influx of business that is way above average. Or, as has been demonstrated recently, lenders that are used to making automated decisions may need to take a more hands-on approach, which puts pressure on the operational structure that the lender has built. This has certainly been the case with some lenders when it comes to Covid-19 as all but the most straight-forward cases need to be manually underwritten to ensure the financial impact of the pandemic is considered.
Another key factor in delivering speed is clear up-front communication, consistency and certainty. Every application requires some supporting documentation and, usually, the more complex the application, the more documentation is required. Good service ensures that brokers know exactly what is required upfront and that additional pieces are not needlessly added throughout the process. It should also mean that a lender remains consistent in its approach and requirements no matter who is dealing with the case.
Technology is a vital part of a lender’s operational structure and can facilitate the speed of decision and processing transactions, particularly if a lender actively engages in more innovative technology like Open Banking to make it quicker and easier to share information. But technology must also be supported by the correct experience and expertise to ensure the process progresses smoothly, and brokers can play their own role in ensuring requests for information are quickly dealt with efficiently.
Service, however, is more than just speed. In the intermediary mortgage market, where the end customer is your client, transparency and communication are crucial so that expectations can be set and managed. Not every case will go through smoothly, so what happens when things are held up? Good service means keeping you informed along the way, so you are empowered to communicate and work with your clients. This is a very simple principle that makes a huge amount of difference. Think about the different experiences, and services, you receive from home delivery companies. It is those firms that let you know what to expect, and then deliver on those expectations that are held in the highest regard – and the same is true when it comes to mortgages.
Service should always form part of your considerations when it comes to recommending a lender. Your clients will want a process that is quick, easy and bears no surprises. By choosing a lender that adheres to the principles of good service, you put yourself in a much stronger position to deliver good service to your clients.
If you have any questions, feel free to give us a call on 0800 368 1833.
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