As web interfaces, online portals, automated loan processing, and sales automation become standard practice in mortgage lending, a new Ellie Mae survey looked at how borrowers used technology to get a purchase loan or refinance an existing mortgage and what more they would like to see in terms of digitization from mortgage lenders.
For the survey, Ellie Mae analyzed the responses of more than 500 borrowers who took out mortgage loans over the past 10 years. The respondents spanned an age group of 35-55 years, with Generation-X borrowers (those in the 35-54 age group) comprising the largest group of survey respondents at 43 percent, followed by millennials at 29 percent. Baby boomers consisted of 28 percent of the people surveyed.
A vast majority, 92 percent, of borrowers, said that they did online research prior to reaching out to lenders in the last year, the survey indicated. This was in stark contrast with just 57 percent borrowers going online for research five to ten years ago.
Borrowers also preferred working with lenders who provided an online portal for sharing documents. The survey revealed that borrowers who were provided an online portal were two times more likely to say technology improved the loan process.
What did borrowers research for online? Some of the most popular reasons for online research for borrowers ranged from finding the best rate and calculating how much mortgage they were qualified to receive, to research on where they could find a trusted lender, the survey found.
The survey also revealed that borrowers were increasingly going online to make the first contact with a lender, followed by phone, which took second place to make the first contact with lenders. In fact, refi borrowers were 21 percent more likely to reach out to a lender online than purchase borrowers, the survey indicated.
Borrowers went online to complete nearly every phase of the loan process from comparing options to application and qualification. The survey also found some things that borrowers wished they could do online. These included, order or pay for an appraisal, pre-qualify with or without a credit report, and get a pre-approval letter from a lender.
For lenders, the survey gave many recommendations including, simplifying the borrower experience with online applications that guide the applicant through every step of the loan process, implementing workflow to automate and streamline data collection and ensure compliance, and most importantly not to forget the human element.