Mortgage applications are one of the only things to stagnate over the decades. Everyone knows the difficulty of applying for a mortgage loan: we spend days, weeks and sometimes even month follow the process and deal with complicated terms. You could have applied for a mortgage a few decades ago and followed the same procedure as you do today.
Or would you like it?
Even though mortgage applications never seem to change, a quiet technological revolution is happening behind the scenes to transform the way we apply for a mortgage. Thanks to fintech and data analytics, we’re starting to see a difference in how things happen – from the moment you get a mortgage quote to when it’s approved or declined.
Automation speeds up the verification process
For years, you’ve had to submit tons of paperwork and official documents to prove things like:
- Your income
- Place of residence
- Age
- Credit score
Nowadays, the way the verification process takes place has changed dramatically. Mortgage lenders can use software tools with AI systems to check different things in seconds or minutes, rather than days. Income verification is now easier for mortgage lenders to verify as your bank details are stored digitally or you can upload a payslip which is scanned and approved.
Credit checks are obviously easier for businesses to carry out, so there is less waiting in the early stages of an application. Lenders can quickly and efficiently see if you are a viable mortgage candidate without wasting time. The same goes for pre-mortgage approvals; technology helps mortgage quote sites verify your details and provide more accurate quote options. This allows borrowers to see where they are lacking Before they apply, which can help them improve in the right areas to be accepted when they eventually apply for a mortgage.
Fintech solutions provide tailored answers
Speaking of the pre-mortgage process, this is an element of mortgages that goes unnoticed. You always think about real loan application process, but you need to think about what happens before that. As mentioned above, fintech solutions allow borrowers to identify their main problems before obtaining a mortgage loan.
Additionally, these solutions offer more customization than ever before.
Fintech platforms can take your financial data (after providing it, of course) and show you what’s actually available to someone like you. It can take into account your entire financial health by linking and analyzing your different bank accounts to see if you can get a mortgage loan – and above all – the best genres mortgages for you.
This could help you identify any viable mortgage programs for someone at your income level, or point you in the right direction to improve a future mortgage application. For example, some of these solutions will look at a person’s financial history and tell them to spend less if they want to take out a mortgage.
Technology like this allows borrowers to take more control of their entire mortgage application by learning what they are able to borrow before jumping straight in.
AI gives borrowers more clarity
Artificial intelligence is one of the main drivers of this technological revolution for mortgage loan applications and its uses are multiple. You’ll see it in a lot of things we’ve already talked about, but one of the main uses of AI is to give borrowers more clarity.
What does this mean?
Essentially, AI tools can serve as advisors to mortgage borrowers, helping them understand the jargon and complex aspects of the application. AI breaks things down – through chatbot assistants or platforms like ChatGPT – so that the search part of an app becomes easier.
You are no longer overwhelmed by financial jargon that makes no sense to you. AI helps you understand everything from mortgage interest rates to other key terms and conditions related to mortgages.
Decisions happen in real time
We talked about the idea of automation in the first point, and it plays a central role in decision-making as well as verification. When it comes time for lenders to fully approve a mortgage application, the decision can be made in seconds.
Will this be the case 100% of the time? No, but if a mortgage application checks all the right boxes, the lender’s system can identify it and give the green light. Rather than waiting a week, the buyer makes a decision immediately.
And the same goes for rejections. If the borrower does not check all the boxes, the system can immediately say that the application is refused. This could then trigger an email response to the application notifying it of the denial, but also informing it of further information about the reasons for the denial. The lender can then review why the request was flagged and respond in more detail, leaving the borrower to work things out for a future request.
This prevents anything from happening over weeks and months, so borrowers can get on with their lives. You can imagine the importance of timely approval when purchasing a home – it can mean the difference between securing the property or forcing the seller to choose another buyer.
An all-in-one platform
Perhaps the most impressive feat of this quiet technological revolution is that mortgage applications can be completed the same day. A platform. Gone are the days when you had to email multiple people within an organization: you can now apply through one portal and keep all your information in one place. Lenders allow you to fill out the correct forms, upload all documents for approval, etc.
Updates are also made through the platform, making the entire application process more synergistic.
The bottom line is that mortgage applications are finally getting a technological overhaul. They’ve seemed clunky and outdated for decades, but we’re seeing key changes that make the experience better for everyone. Applications are easier for mortgage lenders to process and track, while borrowers benefit from the increased speed at which everything happens.
What is very intriguing about all of this is that it is only the beginning. Who knows how advanced mortgage applications will be in the future – or how easy it will be to get the loan you need?
Photo by Jakub Żerdzicki; Unsplash
The article The Quiet Tech Revolution Is Happening in Your Mortgage Application appeared first on ReadWrite.
