In the next few months MortgageGym.com will combine open banking, credit file searches and banks’ internal lending criteria in an attempt to improve affordability calculations.
MortgageGym said currently there is no way of assessing whether the average mortgage applicant can truly afford the mortgages they apply for because of the industry’s reliance on paper-based applications.
The broker said its combined system will help people find mortgage deals they can 100% afford.
John Ingram, co-founder of MortgageGym, said: “We are essentially pioneering the use of Open Banking data in the mortgage sector in a highly practical way.
“We are the only digital mortgage platform that has bank-by-bank eligibility, credit score insights and open banking, which will be the most effective way of assessing mortgage eligibility and affordability in the UK and revolutionise the mortgage sector.
“Who wants to explain to their mortgage broker why they spent a lot on the High Street in one particular month, followed by eating out more than average the next?
“Our categorisation engine will be able to tell that an engagement ring is a non-recurring discretionary expenditure and, even though the ensuing celebrations may have been prolonged, they were not on-going throughout the year.
“As we all need to be assessed when applying for a mortgage, as it’s a regulatory requirement, who wouldn’t want to forgo the annoying explanations and antiquated form-filling? There will soon be a faster, painless and more accurate way of getting the best possible mortgage deal for you.”
In effect, it will take insights into each applicants’ spending via their bank, match it to their Experian credit file and compare this to the mortgage scorecards of 65% of the top 20 mortgage lenders in the UK.
It will also raise applicants’ eligibility – how likely they are to be approved for a mortgage – from 75% to 95%.
The so-called ‘robo-adviser’ said it can now guarantee applicants that they will be able to afford any mortgages presented to them.
It has done this by substituting average statistics on consumer spending from the Office of National Statistics (ONS) when matching applicants with mortgages, to matching each applicants’ exact spending patterns using Open Banking with lenders’ internal checklists.
The platform will provide mortgage brokers with an accurate insight into applicants’ spending over a 12-month period – up from the three-months currently covered through traditional, paper-based questionnaires.
It will also designate spending into five different categories and differentiate between salaries and other income so that applicants will not have to answer embarrassing questions about their income and expenditure. All information is visible to the consumer and their mortgage broker.
These categories include regular income, like salary, irregular income like savings or freelancing, necessary committed expenditure like rent, non-necessary committed expenditure like mobile and TV contracts and lifestyle expenditure for example, going out for food and drink.