Online and instant – a look at e-mortgage trends

On the heels of Millennials will be a tech savvy, social media aware cohort known as Generation “Z". Born after 1997, Generation Z will be comfortable banking online, applying for mortgages via mobile apps all the while – at least according to Wikipedia -- being more risk averse in their outlook than previous generations.

When the time comes, will they routinely meet in person with a mortgage expert to get a home loan or home equity line of credit?

It seems that a purely digital mortgage application experience will inevitably become mainstream in the next 10 years as the oldest members of Generation Z turn 30.

Online and Instant

This summer, Australian fintech outfit Tic:Toc Home Loans (https://twitter.com/tictochome) announced, in partnership with Bendigo and Adelaide Bank, the world’s first instant home loan. The system can approve a loan in 22 minutes and provide competitive rates.

In Canada, the consumer isn’t the obstacle for change. As CMHC reports, “Almost half of mortgage consumers (48%) agree they would feel comfortable using more technology to arrange their next mortgage transaction.”

And in the United States, 62% of homebuyers under 35 would use their lender’s mobile app to apply for a mortgage if given the option, according to a JD Power Survey.

Digital and Hassle-Free

Two startups in the United Kingdom – Habito and Trussle -- are trying to gain market share by taking the mortgage advice and application process entirely digital. Habito claims to generate approvals seven times quicker compared to a traditional process involving a human broker while Trussle shrinks the time for a quote to three minutes, on average.

Habito guides customers through the virtual mortgage application using chatbot conversations. Salary, employment history and other personal information are gathered in order to assess a customer’s creditworthiness, speeding up approvals and cutting out human advisors.

Personal service in demand

Not everyone will welcome a digital focus. In the recent CMHC survey, “the majority of mortgage consumers agree that it is still important to meet face to face with their mortgage professional when negotiating (69%) and finalizing their mortgage (70%).”

Artificial Intelligence is changing the mortgage industry. Personal touch will give way to a more efficient user experience and 24/7 convenience. For better or worse.

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Susan Williams is a Mortgage Development Manager with National Bank of Canada.
Email: susan.williams@nbc.ca Twitter: @YMJourney