Fintech Feature – Mojo Mortgages
Mojo Mortgages is digital mortgage broker, using technology to revolutionise the way people find and apply for mortgages online. Mojo Mortgages offer mortgage intermediary as a service, giving their customers access to real-time mortgage advice.
We spoke to Richard Hayes, the CEO of Mojo Mortgages, to find out more about this exciting fintech.
How would you describe Mojo Mortgages?
We would class ourselves as an online mortgage broker in a conventional sense. Speaking slightly more technically we would call ourselves a digital intermediary, what that means is we are first and foremost an exceptionally customer focused business and we as a team are looking to solve problems that customers face when looking to connect with the right lender.
At lot of Mojo’s future aspirations and goals in terms of our scale and our growth are based very firmly around connecting customers with the right lender. Naturally at the moment that means offering mortgage advice, so Mojo employs mortgage advisors to offer that advice to customers. We do that over the phone, via live chat, the ultimate goal is not only do we offer advice, but we also offer information journeys which means that customers come into their home buying journey much more educated, more financially confident and ready to take this next step onto the home buying ladder. We are a business that is very focused on creating customer confidence when it comes to being mortgage ready and getting mortgage ready.
We believe that being able to utilise Open Banking data to help a customer get mortgage ready quicker is a really valuable proposition for anybody trying to buy a home and led us to develop Mortgage Score. Mortgage Score is a really consumable and valuable proposition for our customers. With all Open Banking and Open Finance propositions, the consumability is just as important as the value it delivers because if customers don’t get it, if it doesn’t actually do what it says on the tin, then it leaves people wondering why they shared their personal data in the first place.
Tell us more about Mortgage Score?
Mortgage Score allows customers to get a window into how the lender sees them, by analysing their spending habits, their use of credit etc using Open Banking. We look at Open Banking as a way of powering what we think is going to happen in your future because you can tell a lot more from someone’s spending habits than you can do their credit history and then we look at credit history as what has happened in the past.
We combine those two things alongside high-level fact-finding information that we get from the customer and that allows us to give them what we call a Mortgage Score. The Mortgage Score basically indicates how ready you are to get a mortgage, and not only how ready you are but also how likely you are to get a really good rate. All sorts of things can impact that but primarily it’s your affordability for that mortgage both from an income and outgoings perspective and a deposit perspective, alongside your credit history and if there have been significant issues in the past.
Then behind Mortgage Score is a really cool feature which we are very focused on expanding out at the moment called Mortgage Coach. This is about taking that score and all the complicated data in its raw form that doesn’t mean a lot to a customer and pulling out nuggets of insight that we can then give them in real time without booking in to speak to anyone.
It will have the ability to understand your aspirations and inform you what is going well, where there is room for improvement and what you need to get really focused on to get mortgage ready. We have heard time and time again from customers that it is the insights that is most valuable to them.
How are you looking to make the mortgage process more transparent?
It is a really hard part of the process. We will be launching a new version of our accounts area and it will keep the customer informed at 18 stages of the application process, which is pretty phenomenal, we are really excited about it. At the moment we report on about 6 stages of the application process and even on those points the customer will find out updates before we do, a lender will write a letter to a customer, fail to inform us, the customer knows before we do.
It’s a really hard part of the mortgage application process which we care immensely about. It’s the main thing that customers complain about when it comes to the mortgage process and it is really upsetting, we care so much about it, unfortunately a lot of it is out of our control. But we at Mojo are constantly looking at how to we take responsibility to solve these problems for the customer whether or not we are the cause of them in the first place.
The 18 stage updates will have a massive impact on Mojo customers and there are a number of other things we are working on to make the process more transparent. We are also right in the middle of integrating with 4 of the top 6 UK lenders, once we have APIs. Those APIs will then start evolving and all top lenders are looking to add status updates to their APIs so we will be able to call that API in real time, collect an update on the information, serve that back to the customer much quicker via SMS or some other notification rather than a letter.
Do you see a future mortgage industry where the customer provides information once via an Open Banking connection and that goes straight to lender?
Yes, and we are not a million miles away. I had a conversation with a lender recently and they are acutely focused on how we can collect data from a customer and almost give them a data handshake or data passport, that says we know this about their affordability, we know this about their credit history, we know this about their circumstances, and we know this about their aspirations. We hand that to the lender and the lender comes back to us with a rating, a rate relative to their specific circumstances and our ability to say we can get you this mortgage at this rate and we know it’s going to get accepted. That’s the ultimate goal and I reckon we will be achieving something like that in the next 12-18 months.
What needs to happen to make this a reality?
There needs to be a change to risk and appetite of the lenders. One of the most significant shifts will be a lenders willingness from a risk perspective to consider a different way of validating information about a customer. They all have robust processes and procedures in place at the moment to determine if they should lend money.
For a lender to make a significant change to what makes up part of their lending policy, they would have to go through a pretty rigorous testing process.
One of the banks I spoke to recently is currently testing automated income verification so that they can model your likelihood of being able to afford that mortgage or not and then validate it with data in the back end. They are having huge success with that , they are seeing a majority of customers that qualify for that modelling and that are ticking the boxes of going straight through from an affordability assessment. Lots of really acute advancements are taking place, that now all need joining together.
It’s that typical ecosystem play, that you see in many other sectors. Everyone uses the Uber example, which is that Uber would have never been possible without google maps. The point is we are at a very similar stage. This really slick process of transactions through to a mortgage offer is possible and all the technology exists today for it to be possible, we just need that ecosystem to mature a little bit. Once it is mature and the lending policy has caught up, I think we are going to be in a really great place.
Securing a mortgage today is still a cumbersome, slow and overly complex process, that tends to overshadow the milestone of buying a home.
The mortgage industry is clearly ripe for disruption and improvement but the seamless, transparent and fast mortgage process that Open Finance promises still seems so far away.
However, the solutions that firms like Mojo Mortgages are developing, along with wider advancements in the industry to correct and connect the ecosystem, provide encouragement gives us hope that real change will come sooner rather than later.
But customers don’t just need support in securing the mortgage; Open Finance gives us the opportunity to support customers on the journey to become mortgage ready – which is vitally important in the current environment where financial literacy is low and financial stress is so high.
Mojo’s Mortgage Score and Mortgage Coach will prove valuable to customers by providing actionable insights on how to get mortgage ready. This will help the next generation of home buyers to be more prepared, more informed and able to access better deals.
The ultimate aim is to create a seamless end-to-end process that truly enhances the experience for all involved, going beyond just transforming the mortgage process and towards connecting the dots across the entire home buying journey. This will require all the different players across the industry to work together and embrace Open Finance which is no small feat. It will be interesting to see if 2021 is finally the year of real change and transformation in the mortgages industry.