In a Mortgage Solutions article I penned around this time last year I suggested that, “2015 will continue to be a year of simplification and improvement, both online and offline, for lenders looking to optimise the intermediary lending channel. Clarity and transparency around products, systems and processes will also remain vital in making it easier than ever for intermediaries to submit business and for clients to fully understand affordability levels.”
Now I’m not patting myself on the back here, as predictions go it was akin to Christmas still being on the 25 December, but what’s important is just how highly these issues remain on many lenders’ agendas. We’ve already seen a great improvement in relations between lenders and intermediaries and, when combined with some much needed clarity for borrowers in the offing, it certainly bodes well for activity levels moving forward.
This clarity will come in the form of a new ‘tariff of mortgage charges‘. In essence this means the introduction of a standard format for how lenders communicate their fees.
This has been devised by the Council of Mortgage Lenders (CML) and Which? after being asked by the Chancellor to find ways to make it easier for consumers to understand and compare the costs of different mortgages with different lenders.
The two key improvements within the tariff are:
- Standard terminology: Different lenders will now use the same names for fees, as Which? research previously found consumers find the existing range of names for similar fees too confusing
- Common format: Each lender will list fees in the same order, and with the same descriptions, to make it easier to compare between lenders
In many ways this represents a victory for common sense. As a lender who was closely involved in this initiative we are fully supportive of these recommendations for an industry wide simplification of fees and charges. Overcoming complexity at a consumer level will certainly help make the advice process simpler for intermediaries. It’s also vital that we, as lenders, get this balance right when dealing with our intermediary partners.
Challenging the clarity of present offerings and adapting a more transparent philosophy will inevitably help strengthen relations across many boundaries. The modern world offers immediate access to a wealth of information, services and opportunities and communications can play a huge part in simplifying and speeding up all links in the mortgage chain. After all, the better equipped intermediaries and borrowers are with easily digestible information, the higher the likelihood of business growth and more efficient and effective service standards across the board.