Anyone who wants to take out a mortgage must provide a lot of data and documents. The mortgage provider’s underwriter then assesses the risk based on this. If the underwriter rejects the application, the process (partly) starts again with the same or another mortgage provider, with the consumer hoping that the risk is acceptable. Fortunately, the data can be provided more and more digitally, which provides some acceleration. But all in all, this traditional method is still a time-consuming process. I believe that this can – and should – be done differently.
Time savings
I increasingly see how much profit it is if you can validate earlier whether a consumer is eligible for a particular mortgage. So before the application is on the underwriter’s desk. This gives the consumer more comfort because they know sooner whether a mortgage is possible – or at least have an indication of this. Do the chances appear to be slim with mortgage provider A? Then the consumer also quickly gains insight into which mortgage provider a mortgage might be possible with. But the bank/mortgage provider, the independent mortgage advisor and the service provider also benefit from pre-validation.
The bank advisor
Every bank has its own acceptance rules that a mortgage application is subject to. If you bring these together in a business rule engine, the bank advisor can already digitally validate the application as soon as the consumer data is available. In a bound advice channel, you can set up a very detailed set of business rules and therefore offer the consumer a lot of certainty at an early stage. That makes the life of the consumer a lot more pleasant. Plus: the bank or mortgage provider does not have to spend time on an application that is very likely to be rejected. This speed also offers a competitive advantage for the bank’s mortgage advisor, who nowadays has to work hard not to lose ground to the independent mortgage advisor. Setting up such a business rule engine is not a complicated process. Any bank can do that tomorrow.
The independent mortgage advisor
As an independent mortgage advisor, you can use software that contains the acceptance rules of various mortgage providers. Our business partner MoneyView has a solid set of data available for all parties in the market. That is not as fine-grained as the set that you can set up as a bank, but it does give a good indication of which mortgage provider(s) a consumer is eligible for a mortgage. This way, the mortgage advisor can offer certainty to his client earlier, namely during the advice process. That is where our other partner Figlo comes in, who is preparing their advice software for this. That is pleasant for the client and it strengthens the position of the mortgage advisor. And by separating the wheat from the chaff earlier, mortgage providers receive better applications from the advisor in question. A win-win-win situation.
The service provider
Service providers can use prevalidation in their workflow management system to perform an initial assessment of the applications that are received. An HDN application in AX format can be compared to the calculation rules of mortgage providers. If the mortgage application does not meet certain criteria, these are highlighted so that the points of attention are immediately visible to the acceptor. This prevents the acceptor from overlooking something and makes the work more efficient. The advantage of prevalidation is therefore further down the chain.
The consumer
Prevalidation tools can also be used for modules with which the consumer goes through an online mortgage flow and inventories whether he or she can get a mortgage somewhere. In addition to the maximum mortgage calculation, the consumer could use this to get an indication of the feasibility of the mortgage. Low threshold is a crucial success factor here. Because the more a consumer has to do, the faster people generally drop out.
Increasingly driven by data
We are increasingly working more data-driven everywhere, also in the mortgage world. In my opinion, that only makes pre-validation more interesting. Pre-validation used to be mainly a trend, but now we see that this approach is increasingly materialising. And not without reason, because the results are encouraging. We also notice this with the Hypact Validator, which we developed and are still developing together with strong partners Moneyview, Figlo and RuleCube. This pre-validation technology ensures more satisfied consumers every day because they have certainty faster and savings for mortgage lenders and service providers because they have less work in the mortgage chain. With even more data, the value of a technology like the Hypact Validator will only increase for everyone involved. And most importantly of all: the financial life of the consumer will improve. And that is exactly what I and Yellowtail Conclusion are all about.
