We're so excited to announce that we will be launching a market-first service called MortgageScore™ in January 2020, allowing thousands of first time buyers the chance to get on the property ladder.
Getting Mortgage Ready
For first time buyers, purchasing a home has never been harder, with barriers such as raising a deposit, poor credit ratings and house prices that have risen faster than incomes, making it nearly impossible for some people. At Mojo Mortgages, one in four of the site’s first time buyers weren’t eligible for a mortgage, putting their aspirations of buying a home on hold. UK-wide data shows that 51% of 25-34 year olds state that owning their own home is their top life goal, however, stats show that 70% of would-be first-time buyers believe the dream of owning a home is already over for many.
There are several things a broker and lender must consider when determining if someone can get a mortgage, but those who are applying often don’t have access to this information and are kept in the dark. If they are declined the mortgage, they may get a vague reason as to why, but there’s very little guidance on what to do next.
MortgageScore™, powered by open banking data from credit bureau Credit Kudos, is set to launch next year to bring transparency and openness to a secret market. It will provide future customers with all the insight they need to get mortgage ready. It’s an evolution of the typical ‘credit score’ and combines credit and employment history, spending habits, deposit saved and income to provide users with an individual score for them. It will clearly show how your score is calculated, where it’s good and where it’s not, and will then give guidance on how to improve the score.
Improving the score means that it’s more likely customers will get a better offer from a broader range of lenders.
Richard Hayes, CEO and Co-Founder of Mojo Mortgages, said: “At Mojo, we’re on a mission to make the mortgage experience better for everyone. That includes being more transparent, and empowering people with information to make the mortgage experience easier. People can sign-up to MortgageScore™ now ahead of its January launch to ensure they are first to access the service.
“From our own research, we found that 40% of people who used our service wanted to get a clear indication of how much they could afford to borrow. While a staggering 82% of our customers didn’t know whether they had a good enough credit score to get a mortgage. By launching this new service, customers won’t be left in the dark when it comes to what they need to do to get mortgage ready.”
Freddy Kelly, CEO and Co-Founder of Credit Kudos, said: “We believe everyone deserves access to fair, affordable credit, whether that’s a loan, a mortgage, or car finance. Unfortunately, at the moment, far too many people are being turned down for credit they could afford because lenders are using outdated, inaccurate data to assess affordability. We are very excited to partner with Mojo Mortgages on this new service and help millions more first-time buyers get onto the property ladder.”
Utilising open banking data
The service will be powered by open banking data from credit bureau Credit Kudos. Once the score is calculated, MortgageScore™ will offer personalised coaching and insights to turbocharge users towards mortgage readiness.
What is open banking?
Open banking is a way to manage, move and make more of your money. It lets you choose to share your banking information securely with a growing number of authorised organisations – and to benefit from new products and services that’ll improve online banking and shopping. When it comes to mortgages, using open banking data can streamline several elements. For example, you won’t have to fill in your income and expenditure manually or guess how much you spend on alcohol every month. Accessing your banking data means it’s all there, saving a lot of time. It also means your mortgage application will be completely accurate, so when lenders complete checks further down the line, you won’t end up with any issues or delays getting an offer. This makes the whole process of getting a mortgage more transparent and will enable quicker mortgage decisions.
Access to better credit for everyone
MortgageScore™ will also allow better access to credit for everyone. In the UK, around 35% of people who are looking to purchase a property are declined a mortgage due to the eligibility criteria from lenders that knocks them out of the process. Most buyers have no idea why they were declined and have no idea what the lenders eligibility criteria is. MortgageScore’s coaching module will solve this issue as it will empower users with tailored coaching advice to tell them exactly what they need to do to get mortgage ready.