Technological innovations have influenced the vast majority of the finance industry. The complex nature of the property finance market, however, makes it difficult for many borrowers in the specialist lender market to secure loans.
Borrowers that fall through the gaps are typically commercial property owners. Without the ability to secure funding, developers miss out on opportunities and struggle to grow.
The transition from traditional lending channels to digital platforms has been a long time coming in the property market. Slowly but surely, lenders have been adopting digital technologies to meet the demands of the younger generations.
Whilst digital mortgages have become predominantly automated to speed up the process, borrowers in the property finance market continue to encounter obstacles, delays and frustration.
A new digital platform provided by Pitch4Finance aims to eliminate the challenges in the specialist lender market. Borrowers are matched with lenders based on their lending criteria.
Digital algorithms are instantly able to identify lenders that are willing to meet the loan criteria of applicants. This significantly reduces the amount of time it takes for applicants to find lenders.
““The platform provides instant criteria matching that literally matches lenders to borrower criteria within minutes and allows lenders to efficiently find borrowers who match their lending criteria and risk profile,” said Miranda Khadr, CEO of Pitch 4 Finance.
One of the key advantages of digital platforms is speed. Quick turnarounds can be a decisive factor for the property finance market.
The problem with traditional lending is that the process can take around 4-6 weeks for the loan to be approved. If the application is declined, property developers risk missing out on an opportunity.
Digital technology speeds up the process and applicants have the satisfaction of knowing if their application was successful in good time.
Many disruptive technologies have focused on improving efficiency. Despite the benefits, some people still appreciate the human touch.
The 2018 Ellie Mae Borrower Insights Survey found that 16% of loan applicants applied for their loan completely online without any assistance. Forty-five per cent completed the entire process in-person, whilst 37% leveraged a combination of an online application and in-person interaction.
Mortgage advisers are still a central component of the property finance market. Some customers need educating, others need assurances. The aim of digital technology in the property finance market is to give customers more control to have a choice.
An enduring criticism of the financial sector is the lack of transparency. Digital technologies, in principle, advocate for greater transparency by recording an audit trail of the entire discussion that has taken place.
The Pitch 4 Finance platform, for example, features a dashboard for borrowers and lenders to exchange messages and attach documents. The entire loan process can be orchestrated on the platform; from the initial application all the way through to completion.
Because all correspondence is conducted and recorded within the platform, the interaction between brokers and clients can be recovered at any point. Real-time updates and one-to-one support are also available.
With traditional mortgage lenders failing to meet the demands of the property finance market, a handful of digital lenders and challenger banks have stepped in to fill the void.
Subsequently, digital technology is transforming the property finance market for borrowers that fall inside and outside general lending criteria.
Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.