All those banks, with HUGE brand names, the way they lent money… gone!
Things will inevitably get better again, although all the detail will be different. Here are three things I hope we incorporate for a better mortgage world:
1) Specialised underwriting
Pay a premium on rate or fee (within moderation) for an individually underwritten mortgage.
No fibs or liars loans required. No excessive greed from lenders – wanting maximum profit for minimum underwriting and cost. Any banks who think we have got this right currently – you are miles off.
We all got it wrong last time. Is it that difficult to get right this time? No.
2) Computer says… “Yes!”
Simple mortgage applications can be automated to offer… Centralised information is upon us.
The ability of credit search agencies to share income hitting people’s accounts is here. Let’s get it right for simple cases.
Paperwork, P60s, bank statements, payslips, proof of ID – all clogging up desks, filing cabinets and absorbing time – not needed surely?
3) Stamp Duty
The idea that you pay, for example, £26,000 tax to buy a £650,000 family home is, frankly, a crime against humanity.
The property market cannot recover until this is addressed. I am talking about ease of transactions. We pride ourselves on our social liberalism as a country, but this is disgusting.
How to pay for it… higher stamp duty for property investors than residential ownership?
So that’s it. We all want to feel that we are building for a better future and I envisage how these sorts of changes would make the mortgage and UK property markets much more fair, truthful and vibrant.
Dominic Hennessy is principal at mortgage advice firm Just Us Mortgages