In today's world of digital technology, many people are online looking for solutions, answers and even mortgage loans. And why wouldn't they be? Digital means fast. Digital means efficiency. Digital means convenience and even accuracy.
In comparison to many other industries, the mortgage landscape has been slow to adopt new technology. Banks have been especially late to the party. Much of this is due to past investments big institutions made in branch networks. Converting these business models to meet today's online shoppers is not an easy task, nor is it an inexpensive one.
Digital mortgage technology
The goal of the digital mortgage process is to make financing a home faster and easier for consumers, while maintaining compliance standards and profitability for lenders.
Digital mortgages vary depending on the institution. More often than not, the concept behind a digital mortgage is self-service. Digital mortgage technology allows homebuyers and refinancers alike to upload financial documents and sign loan documents electronically, from the convenience of their home or office, at a time that works for them.
The digital mortgage process can even go as far as a fully paperless experience where all documents are executed electronically.
Digital mortgage application
Digital applications involve applying for a mortgage via an online platform. This application may not even require so much as a phone call or a branch visit to secure a home loan.
A standard mortgage loan application, also known as the Uniform Residential Loan Application, contains more than 300 fields. Most digital mortgage applications are capable of prefilling the vast majority of this information for you. This reduces the time spent on the mortgage application process.
As home buyers enter their information and upload documentation, everything is instantly transferred to the lender's loan origination system. This enables a jump start to the loan disclosure process.
Quicken Loans' Rocket Mortgage, for example, allows consumers to enter their personal information into a website or a mobile app. They can use this same technology for providing their income and asset documentation.
Since introducing the Rocket Mortgage, many other mortgage lenders have followed suit and offer similar options. If this is an important feature to you, be sure and ask your lender about their digital mortgage process options. If they don't offer much in this regard, you should definitely shop and compare as you won't have to look far to find fully automated processes.
Digital mortgage trends
A digital mortgage is more of an ideal than a product. A true digital mortgage is typically used to describe a smooth, fully digital mortgage process. Digital mortgages bring automation to the home buying process. Automation offers an engaging, intuitive user experience that lasts from application to closing and beyond.
Combined with the homeowner's data, automated marketing campaigns can be created to drive consumers to a lender's online platform. Additionally, secondary markets are using automation to create a unique, personalized risk and market-based workflow. Even underwriting involves a large amount of artificial intelligence, reducing time and costs.
Digital mortgages appeal to first-time homebuyers
Younger, tech-savvy consumers may feel comfortable with digital mortgages, while some consumers may yearn for a traditional, face-to-face interaction and mortgage loan process. For those who prefer the old-fashioned method of going into a mortgage branch and sitting down with their mortgage lender, that remains an option.
No matter your preference, one thing is for sure. We're just scratching the service in the area of digital mortgages. Homeowners live in a digital age connected by technology. Most folks want mortgage lenders to move into their world, where digital automation is maximized.
In the old days, as in just a few years ago, mortgage lenders would take several weeks (or longer) to approve or deny a mortgage loan. These days, the digital mortgage application process can mean getting an answer in a matter of days, sometimes even minutes.