As the mortgage industry continues to work through when, how and how fast to adopt new technology that makes getting a mortgage more digital and automated, homebuyers are signaling their approval and going further to say they want even more digital solutions the next time they buy a home. That’s according to a new Cloudvirga survey among new, mostly first-time homebuyers that asked about their experience during the mortgage application and closing process. More than 1,000 new homebuyers were asked about their perceptions on the use of technology, artificial intelligence (AI) and automated communications.
The survey found that the majority of respondents were overall satisfied with the online and self-serve aspects of the current origination process and expect even more automation with their next home purchase. However, when asked specifically about the use of AI, participants raised serious concerns with more than half (60%) saying the use of AI in the loan process would cause them to select another lender. This is despite the fact than almost three-quarters (74%) of survey respondents were 40 or under, a demographic that is comfortable with digital technology. The reluctance to fully embrace AI presents a challenge for lenders as they grapple with the specifics and timing of implementing new digital solutions.
Apart from the unease with AI, consumers are ready and willing to go digital with their mortgage—no surprise since so much of their other purchase interactions are driven by automation. According to the survey, a majority of respondents (71%) said they were very satisfied with the technology provided by their lender for managing the application process. Likewise, more than a quarter (27%) said they were somewhat satisfied, and 67% said they were very satisfied with their lender’s online support.
Not only did they like their digital mortgage experience, a majority (63%) said they would have preferred their experience to be even more digital than it already was, and 77% of respondents expect their next mortgage or refinance to be totally digital.
One of the big questions for lenders with regard to automation and digital solutions is where do loan officers fit in as more functions are automated? The good news for loan officers is that homebuyers are still relying on them. A majority of respondents (58%) said their loan officer handled the initial application process for them, and almost half (46%) said their loan officer contacted them directly via phone or email when additional information or supporting documents were required. Given the level of overall satisfaction with their mortgage process—which still involved loan officers in both the application and ongoing document procurement process—this underscores that while consumers are eager to embrace technology, they still want the ability to rely on human assistance when needed.
As lenders make the digital transition, functionality related to automated communications, eSigning capabilities and digital document delivery are some of the first solutions they adopt. A majority of survey respondents said they had access to technology that allowed them to receive real-time updates on loan status (69%), automated document submission (72%) and access to helpful tools like eSigning (52%), all of which have contributed to smoother and faster transactions. Furthermore, respondents reported overwhelming satisfaction with the process for submitting and managing documents with 91% saying they used one system to complete and upload all required documentation, and 92% saying they were somewhat satisfied or very satisfied with the process for submitting documentation.
This survey clarifies important nuances in consumer preferences regarding the mortgage origination process: Homebuyers want the ease and efficiency of digital platforms that provide an automated, borrower-friendly user interface, but they are still relying on loan officer involvement and are not ready to fully embrace AI. This is good news for the many lenders who are well down the path of digital transformation, offering an improved automated and less-manual experience for borrowers. But it’s also a cautionary flag not to go too fast in moving completely to AI. Cloudvirga CEO Maria Moskver said it best, “Lenders need to be cautious with how they develop their digital, borrower-first experience, taking a measured approach that meets consumers where they are,” she said.
For more information on digital mortgage solutions, connect with our team today.
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