Borrowers still prefer personal service to automation
In the age of high-tech everything – including online loan applications – it’s interesting to note that most home buyers and sellers still depend on estate agents, home loan consultants and conveyancers to guide them through the actual purchase process in a series of personal interactions.
This doesn’t mean that they are not increasingly aware or appreciative of the benefits of technology, such as the time they can save by house hunting online, or the speed with which home loan applications can now be processed.
“It does mean, however, that most people still prefer being able to access expert advice face-to-face before making major financial decisions,” says Shaun Rademeyer, CEO of BetterBond Home Loans, which accounts for more than 25% of all residential mortgages being registered in the Deeds Office and is SA’s leading bond origination group.
“It also suggests an increasingly relevant role for originators as the interface between potential borrowers and lenders – and especially for those who can successfully combine ‘old fashioned’ personal service with the speedy responses enabled by superior technological capabilities.”
This is illustrated, he believes, by the fact that BetterBond and other originators are experiencing a much higher rate of growth in the value of home loans they are able to get approved than the national rate of growth in mortgage lending as stated by the Reserve Bank.
“The national rate stood at an annual 2, 9% at the end of March and by contrast, our figures show that at end-March, we had achieved a 9% year-on-year increase in the total value of the loans for which we secured approvals.”
Rademeyer says the success of the originators is partly due to the fact that they are often able to ‘rescue’ applications that have been declined by borrowers’ own banks and get them approved by a different institution – “although in our experience the majority of home buyers would still prefer their lender to be the bank with which they have an existing relationship and will usually ask us to apply to this institution first”.
“However, we believe it is also due in large part to the fact that BetterBond loan consultants offer a personalised while highly convenient service to each applicant, whether they are seeking pre-approval for a bond or an actual home loan.
“Prospective borrowers tend to have a lot of questions that they want a real person to answer, and they are also not comfortable with the idea of a wholly impersonal evaluation process in which there is no recourse if an application is rejected. They want someone to motivate their individual application and submit it to multiple banks if necessary, and if they get several acceptances, they want help to choose their best loan option.”