Dream Homes and Data

When it comes to home loans, open banking is regularly mentioned as the technological hero. The data sharing initiative at the core of it means consumers can get their mortgages approved quickly and effortlessly and largely via an app without the need for lots of documentation. A broker or a lender can easily assess the risk of an applicant and put together the best solution for them. It also enables frictionless switching between loans when a better deal for a customer comes onto the market. However, there are some drawbacks. Firstly, a lot of mortgage applications are done jointly so aggregating the data of each individual into one app can be an obstacle. Secondly, having the technology doesn’t mean that traditional banks are deploying it. This could be for a variety of reasons such as change management issues, technical problems or miscommunication between departments. But it is a hurdle that needs to be overcome. Thirdly, sharing data about savings and spending habits across multiple accounts can be daunting for a consumer who would rather share the bare minimum required to get a mortgage, than have their entire financial health open to scrutiny. 

There are a number of fintech apps which are already helping to streamline the process of buying a home. These apps look young and fun, use accessible language and have excellent functionality. Habito is one broker which, powered by open banking, helps consumers find the most suitable mortgage from almost one hundred lenders and twenty thousand different types of loan. It also helps customers to go through the whole process of purchasing a house as well as offering the best options for remortgaging from the marketplace. Trussle offers access to thousands of loans with the assurance that a deal can be sent within twenty-four hours of an application. Like Habito it charges no fees and many of its reviewers claim they have saved money by using its services for remortgaging. Dashly utilises open banking to evaluate an individuals’ mortgage against various factors such as their personal circumstances and other offers available in the market at all times of the day. It then helps them to save money by switching to a better deal. Nude helps first time buyers in the UK to save deposits. Like other financial management apps driven by open banking, it monitors their spending habits and makes recommendations. However, in the case of Nude, its suggestions are all related to helping its users reach their deposit goals. It also tracks anything in the marketplace they could take advantage of, such as government bonuses. 

The processes of buying a dream home or remortgaging a current one, are going through a transformation as a result of open banking. Consumers have real-time data from a vast marketplace at their fingertips, as well as the tools to help them save, apply for mortgages and switch loans. There are some obstacles, not least of which is the people factor. An individual must understand the full benefits of these new products and services before consenting to share their data and a bank must have all of its team on board before implementing the technology. However, with so many fintech apps springing up, it’s a sector which is set to change from its usual formal rigidity to something more fluid and bespoke. 

Pay iO’s articles do not constitute financial advice and are for information only.