Target Group has “re-imagined” the role of a decision in principle (DiP), with the aim of transforming the mortgage applicant process.

The firm intends to cut the process from up to eight weeks down to seconds for lenders using Target’s recently launched mortgage hub system.

The system has developed a way to provide accurate income expenditure and property valuation information at the beginning of the application process, meaning that lenders can provide a DiP based on real, rather than estimated, information.

A DiP has usually been given by a lender based on estimated information, both on the value of a property and on what the potential homebuyers believes or declares to be their income and outgoings. However, at least one of these elements provides to be inaccurate, which can delay the mortgage offer by weeks or make it unviable.

As part of the new process, Target’s mortgage hub enables the broker to send their client a link to open banking permissions at the first meeting whilst completing the fact find, which verifies the client’s income and expenditure in seconds so the lender will know whether the client can afford the mortgage they are applying for.

The process will also link to a lender’s automated valuation model, where this is available for a property, speeding up the process to provide a real property value, rather than an estimate from a borrower or estate agent.

Each AVM will be matched to a lender’s risk threshold with a ‘certainty score’ of how accurate the valuation is. Lenders have the facility to flag a valuation as to whether it can be approved or should be reviewed, which will be done automatically, so will provide an answer within seconds.

Managing director at Target Group, Katie Pender, said: “We designed our mortgage hub and the DiP process around the people using it. We looked at what the challenges were and then built the mortgage hub to provide the solutions.

“What we have designed will dramatically shorten the time it takes to apply for a mortgage, achieve acceptance and successfully complete. Basing a DiP on accurate information that can be gathered in moments should be transformative, saving time for brokers, lenders and the end client.

“We believe that our Mortgage Hub is the only mortgage originations system that has been built to be user-centric rather than product-centric. Together mortgage hub and our new DiP process benefit lenders, conveyancers, brokers, and ultimately the end borrower.”

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