Remember when people first started using mobile phones? Those oversized bricks which became the symbol of the yuppie generation. To begin with no one really thought they would catch on and many people promised themselves they would not be sucked into using them. Thirty years on from the first mobile phone call and now 84 per cent of the UK population owns a mobile phone. Similarly, within the mortgage industry we have seen technological advances take place that some people have taken longer to warm to than others. More recently, the launch of point of sale offers (POSO) is, in my view, the most groundbreaking innovation ever within our historic sector. Like anything new, people will catch on at varying speeds but it is vital that the industry welcomes this revolutionary step with open arms and not suffer from technology envy.
Technology will always evolve and continue to provide opportunities that offer greater efficiencies for intermediaries, packagers and customers alike. The problem with technology is that not everyone always keeps pace. Decisions in principle (DIPs) are still around, unfortunately. The onset of binding decisions began their demise and now instant offers will accelerate this. But why? Well point of sale technology now means that a full, instant, online offer can be provided with credit and valuation all being done – on-line. The offer is generated in minutes; so far the average time is 25 minutes from turning on the computer to getting an offer. That’s right, not weeks or months, minutes. This saves everyone in the process both time and money and providing greater speed and certainty for the customer. For intermediaries and packagers the arrival of instant offers eliminates the days of spending hours chasing references, offers and valuation reports. Even when an automated valuation is not available, the new process is better and quicker than the existing manual arrangements which hold customers up for weeks. At GMAC-RFC we believe that using point of sale offers could week be the equivalent of doubling the proc fee.
Despite automated valuations being around for a couple of years, they have recently become a hot topic in the press. According to the CML 40 per cent of all mortgage applications will have an automated valuation attached to them. But the real trick is to combine these with other elements to create an instant offer. No doubt there are a number of people within the industry out there who feel reluctant about relying on technology such as automated valuations. But they were probably sceptical about mobile phones, the internet and digital cameras.
Making sure everyone keeps up to date with technology is important. Lenders who do not evolve with technology run the risk of finding themselves with a small market to serve. At the moment lots of noise is being made about automated valuations and instant mortgage offers but this is only the beginning. The power of technology will not stop here and who knows what other technological advances will come along over the next 5 years to further streamline the home buying process.
