Weighed Down by Too Much Paperwork for that Mortgage?
Weighed Down by Too Much Paperwork for that Mortgage?
Home buyers want the mortgage process to be less onerous and faster. But they also want more personal interaction as they navigate a transaction and very big decision in their life, according to Fannie Mae’s National Housing Survey, a survey of about 3,000 recent home buyers.
“As the Amazons and Ubers of the world continue to raise the bar for ‘consumer-grade’ experiences, home buyers have made it clear that it’s also time for the home purchasing and mortgage processes to change,” writes Henry Carson, senior vice president of digital products, at Fannie Mae’s Perspectives blog.
Overall, borrowers say they want less paperwork. They said gathering the necessary financial information to apply and get approved for a loan is the most difficult part of the mortgage process, which was particularly true for those over the age of 45 or those who’ve purchased more than one home in their lifetime.
Respondents were asked whether they would prefer a fully digital mortgage process, where every step could be completed online. The majority said they would be “somewhat” or “very” interested.
They do like the idea of a digitizing the application if it would speed up the process. The majority of home buyers surveyed said they’d like to see the mortgage process—from application to closing—completed in one month. That is five days less than the current median process takes, which averages about 35 days, Carson notes.
But home buyers still want personal interaction in the process too. They noted they want personal interaction in the review of final loan documents and understanding mortgage terms and options.
Carson says that Fannie Mae is partnering with lenders to digitize more aspects of the mortgage process, such as the validation of borrowers’ income, assets, and employment data. Carson notes the technology Fannie is sharing with lenders is reducing the application to delivery cycle times by 7 days. He says the goal is to reduce it by 10 days.
“Change in the mortgage industry is accelerating, opening the door for potentially significant impact and value creation for lenders and homebuyers,” Carson notes.
