Could Open Banking speed up the mortgage application process?
The time it takes from the initial application for a mortgage to the availability of funds can be many weeks, which is partly due to the number of documents that must be submitted and checked. Some analysts have noted that Open Banking could help speed up the application process.
Whether you are applying for a residential mortgage or a business needing a commercial mortgage, it is necessary to prove affordability. The lender needs to be satisfied that the borrower can afford the mortgage repayments, even if interest rates rise.
Consents Online is an organisation working with major banks that is developing a system for mortgage brokers to enable them to check the financial status of a borrower using Open Banking. Open Banking is a system that banks are developing to share financial status data about their customers. Consents Online is creating an Application Program Interface (API) to enable mortgage brokers to use software that connects to the Online Banking system data. This can be used as evidence of mortgage affordability.
Currently, checking a mortgage applicant’s income is done manually, but an online system could save a lot of time. Consents Online expect its system to be fully functioning within 12 to 18 months. Banking giant HSBC is working with Consents Online to provide data for the system.
Mortgages delays frustrate property buyers who want to complete purchases quickly. The Open Banking system and other technology advances aim to automate parts of the application process to make mortgage funds available more quickly.