“No one wants to get their mortgage online,” I remember a veteran agent telling me when I started brokering in 2007. “People want to look you in the eye before they trust you with the biggest debt of their life.”
I wonder if that broker would say the same thing today. He definitely won’t say the same thing a decade from now.
Times can change before we know it as technology enables customers to do things online that many once thought improbable. Discover Home Loans released a recent survey that hints at how the landscape is changing. It’s US data, but worth a good look regardless.
The company surveyed 1,003 people and found that
- nine in 10 used the Internet for part of their mortgage process;
- 54 per cent have filled out one or more online applications;
- 47 per cent got prequalified through a lender’s website;
36 per cent said it would be easier to get a mortgage without any phone calls or lender/broker meetings;
- but 94 per cent still report communicating with their lender by phone (in Canada, “know your client” rules are not supportive of closing a mortgage with no verbal contact); and
- 67 per cent still met their mortgage originator in person.
Among other things, online mortgage origination is being driven by demand from self-directed millennials, professionals and busy families. More of these folks are looking for quick, convenient, lower-cost mortgage solutions. And they’re starting to adapt their use of mobile devices from real estate research (where 89 per cent of homebuyers use a mobile device) to mortgage research. But it’s early days in that sense, with only 15 per cent of online mortgage consumers accessing mortgage information from a mobile device.*
It also helps that consumers are increasingly open to emailing documentation and submitting sensitive information online:
- 86 per cent of recent homebuyers felt comfortable sharing personal information online;
- 71 per cent said they have submitted mortgage documents via email, apps or websites;
- 50 per cent have submitted scanned documents.
As people become less reliant on bricks-and-mortar mortgage purveyors, several elements could drive online mortgage growth, including:
- easy-to-use online expert systems for pre-qualifying customers (Centum’s is one early example);
- online mortgage comparison tools and advanced calculators;
- electronic signing technology (it’s widespread in the US but in its infancy in Canada’s mortgage market);
- web-based chat support and video chat;
- online screen share and web presentation technology (both of which can facilitate full-service mortgage planning on the Internet).
These trends will spawn novel ways of servicing mortgage clients, ways that will become entrenched in the industry. And if such change is indeed on our horizon, then Malcolm X said something mortgage professionals should all live by: the future belongs to those who prepare for it today.