Consumers Want More Online Mortgage Features
The Fannie Mae's National Housing Survey (NHS) polls a large panel of consumers monthly about their attitudes toward housing and related topics and generally reports on five or six of the survey's trendlines. Others of the 100 or so questions form the basis for occasional special reports such as a new one in the company's Perspectives Blog. Henry Cason, the company's head of Digital Products, details some new revelations about consumers' appetite for better digital resources to speed up the mortgage process.
Cason says, "As the Amazons and Ubers of the world continue to raise the bar for "consumer-grade" experiences, homebuyers have made it clear that it's also time for the home purchasing and mortgage processes to change." While getting a mortgage is much more complex and heavily regulated than calling for a ride, the digital experiences of consumers with other businesses have increased demand for ways to speed up the mortgage process. This demand comes at a time when lenders are citing cost-cutting as a major priority, but they rank the creation of consumer-facing technology even higher. That makes it critical for lenders to allocate their resources appropriately, giving consumers the right technology while preserving the human touch they say they still want.
To assess the needed balance Fannie Mae used the NHS to ask about 3,000 recent homebuyers which aspects of the mortgage process they think would benefit most from digitization and which areas are best supported with a human touch. Cason says that "Above all, borrowers want less paperwork. Gathering the necessary financial information to apply and get approved for a loan was cited as the most difficult part of process by far. This is especially true for those over the age of 45 or those who have purchased more than one home in their lifetime." These homebuyers thin the application and preapproval process could benefit from digitization as well and 66 percent said they would be somewhat or very interested in a fully digitized process where all steps could be handled online.
When breaking down the benefits they see from access to more online capabilities, 27 percent cited a reduction in paperwork, 20 percent said it would make it easier to compare offers from various lenders, and 16 percent said they wanted less "back and forth" during the process. The majority of homebuyers said they thought the mortgage process, from application to close, should ideally take only one month which is five days less than the median today.
While younger and higher-income borrowers tend to prefer digitization more frequently than others, most borrowers still appreciate some human interaction during some of the more complex or critical steps in the process. More than two-thirds (67 percent) would like to be preapproved online, 72 percent want to file an application digitally and 70 percent want to do the same with financial documents. Still, 65 percent want a person there to explain mortgage terms and options, 58 percent want someone to review loan documents for them and 56 percent want help with the signature process.
Cason says changes to accommodate these kinds of consumer demands are accelerating. Fannie Mae is partnering with lenders to create digital experiences that will improve the process and have helped lenders "leverage digital data from third-party vendors to quickly validate borrowers' income, assets, and employment data." The automated program interface has already reduced the application to delivery cycle time by seven days and the company hopes to reduce it to only ten.