Mortgage applications are one of the only things to remain stagnant across various decades. Everyone knows the pain of applying for a mortgage loan: you spend days, weeks, and sometimes even months going through the process and dealing with complicated terms. You could’ve applied for a mortgage a few decades ago and gone through the same procedure as you would today.
Or would you?
Despite mortgage applications seeming like they never change, a quiet tech revolution is going on behind the scenes to transform the way we apply for mortgages. Powered by fintech and data analysis, we’re starting to see a difference in how things happen – from the moment you obtain a mortgage quote all the way through to approval or denial.
Automation Speeds The Verification Process Along
For years, you had to submit loads of paperwork and official documents to prove things like:
Your income
Place of residency
Age
Credit score
Nowadays, there’s been a dramatic shift in how the verification process happens. Mortgage lenders can call upon software tools with AI systems to verify different things in seconds or minutes, rather than days. Income verification is now easier for mortgage lenders to check because your bank details are stored digitally, or you can upload a payslip that gets scanned and approved.
Credit checks are obviously easier for companies to do, so there’s less waiting around in the early stages of an application. Lenders can quickly and efficiently see if you’re a viable candidate for the mortgage without wasting your time. The same goes for pre-mortgage approvals, too; technology helps mortgage quote sites verify your details and provide more accurate quote options. It allows borrowers to see where they’re lacking before they apply, which can help them improve in the right areas to achieve acceptance when they eventually go for a mortgage.
Fintech Solutions Provide Tailored Answers
Speaking of the pre-mortgage process, this is an element of mortgages that flies under the radar. You always think about the actual process of applying for the loan, but you should consider what goes on before that. As mentioned above, fintech solutions let borrowers identify their key struggle points before getting a mortgage.
To add to that, these solutions deliver more personalization than ever before.
Fintech platforms can take your financial data (after you provide it, of course) and show you what’s genuinely available to someone like you. It can take into account your entire financial health by linking and analyzing your various bank accounts to see if you can get a mortgage – and more importantly – the best types of mortgages for you.
This could help you identify any viable mortgage schemes for someone of your income level, or point you in the right direction for how to improve a future mortgage application. For instance, some of these solutions will look at a person’s financial history and tell them to spend less if they want to afford a mortgage.
Technology like this empowers borrowers to be more in control of the entire mortgage application by learning what they’re capable of borrowing before diving straight in.
AI Gives Borrowers More Clarity
Artificial intelligence is one of the main drivers behind this tech revolution for mortgage applications, and it has multiple uses. You’ll see it in many of the things we’ve spoken about already, but one of the key uses for AI is to give borrowers more clarity.
What does this mean?
In essence, AI tools can serve as advisors to mortgage borrowers, helping them understand jargon and complex aspects of the application. AI breaks things down – either through chatbot assistants or platforms like ChatGPT – so the research part of an application becomes easier.
You’re no longer overwhelmed by financial jargon that makes no sense to you. AI helps you understand everything from mortgage interest rates to other key mortgage-related terms and conditions.
Decisions Happen In Real Time
We spoke about the idea of automation in the first point, and it plays a pivotal role in decision-making as well as verification. When the time comes for lenders to approve a proper mortgage application, the decision can happen within seconds.
Will this be the case 100% of the time? No, but if a mortgage application ticks all the right boxes, the lender’s system can identify this and give the all-clear. Rather than waiting for a week, the buyer gets a decision straight away.
And the same is true for rejections. If the borrower doesn’t tick every box, the system can immediately say the application is denied. It could then trigger an email response to the application telling them of the denial, but also informing them of further information as to why. The lender can then look at why the application was flagged and write back in more detail, letting the borrower work on things for a future application.
It stops everything from happening over weeks and months, so borrowers can get on with their lives. You can imagine the importance of a swift approval when buying a house – it can be the difference between securing the property or forcing the seller to pick another buyer.
An All-In-One Platform
Perhaps the most impressive feat of this quiet tech revolution is that mortgage applications can happen on one platform. Gone are the days when you have to email multiple people within an organization – you can now apply via a portal and keep all of your information in one place. Lenders let you fill in the right forms, upload any documents for approval, and so on.
Updates happen via the platform too, making the entire application process more synergistic.
The bottom line is that mortgage applications are finally going through a tech overhaul. They’ve felt clunky and outdated for decades, but we’re seeing some key changes that make the experience better for everyone. Applications are easier for mortgage providers to go through and keep track of, while borrowers benefit from the increased speed at which everything happens.
What’s very intriguing about all of this is that it’s merely 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
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