Neal Jannels is managing director, One Mortgage System (OMS)
With a growing number of homeowners seeking to unlock equity from their property without disturbing their first charge mortgage arrangements, it’s little wonder that a huge amount of activity and interest is being generated across the second charge marketplace.
This is a sector which has not always enjoyed the attention or levels of business that it has arguably deserved. Although it has come a long way in recent years, especially from a tech standpoint.
API INTERGRATION
This is evident in the many conversations we are having with second charge specialists and lenders with a second charge arm.
Past conversations have swiftly turned into positive actions and we recently completed full API integrations with secured finance lender Selina Finance. Such integrations are in place to help support and speed up the advice process, sourcing and delivery of the type of products which are in such demand.
Demand which is expected to continue as many homeowners evaluate their options in terms of creating and utilising more space in their home.
As highlighted in recent data from Evolution Money which suggested sustained growth in the volumes of second charge mortgage lending to prime borrowers. The research emphasised a trend whereby there is growing parity between the volume of second charge lending to prime borrowers, compared to that made to debt consolidation borrowers.
The lender puts this down to a greater demand amongst existing homeowners to utilise a second charge mortgage for non-debt consolidation purposes, a trend which only seems likely to continue.
Over the last three months, the most common uses of a debt consolidation second charge mortgage remained consistent.
Over half were used to pay back a loan provider, followed by paying a bank, repaying retail credit, followed by car finance. Borrowers also used their second charge mortgage to pay debt collectors, first-charge mortgages and utility providers.
As outlined in this research, the speed of turnaround and the ability to access funds far quicker than with a remortgage or product transfer remains a key asset for this sector and is one of the main reasons why technology is playing an increasingly important role for forward-thinking lenders.
Taking a step back for a moment, whilst the importance of technology is repeatedly referenced across all areas of the mortgage market, it’s often talked about in very general terms. So let’s be a little more specific and outline what an API actually is and what does such an integration really mean?
Firstly, an API is an application program interface. From a technical perspective an API is a set of routines, protocols, and tools for building software applications. Basically, an API specifies how software components should interact. Additionally, APIs are used when programming graphical user interface components. A good API makes it easier to develop a program by providing all the building blocks. A programmer then puts the blocks together. In short, it supports the processing of requests and creates seamless communication between other systems which is a must in the modern mortgage market.
collaborative tech
API’s support a host of applications which intermediaries can integrate into their daily working lives to streamline processes and lessen administrative burdens. Customer relationship management (CRM) systems help manage customer data, support sales management, deliver actionable insights, integrate with social media and facilitate team communication. Cloud-based CRM systems offer complete mobility and access to an ecosystem of bespoke apps.
An API integration with a lender means that advisers can essentially tap into their full product range, in this case via the OMS platform, to carry out a full decision in principle, without the need to rekey any data. By that I mean users will already have full clients details stored within their CRM system, so when looking to source a product with a lender who has an API link in place then this can now be a seamless journey.
Collaborative tech trends such as these are helping to change the way businesses operate by simplifying and speeding up processes. Inevitably, some lenders will be more switched onto the opportunities this creates, some will lag behind and some still have system legacy issues to overcome which makes this a tougher and longer-term ask. The appetite from lenders is there and thankfully we are heading in the right direction, but this does remain work in progress.
