Despite technological advances, referrals are still the main way homebuyers choose their mortgage lender.
Ellie Mae’s 2017 Borrower Insights Survey found that 23 percent of homebuyers picked their mortgage lender based on a referral from a friend or family member, 17 percent a referral from a bank and 16 percent a referral from their agent.
The survey also found that homebuyers are still mostly applying for their mortgages completely in person.
Fifty-seven percent of homeowners applied for and completed their mortgage in person, while 28 percent applied for and completed it partially in-person and partially online. Eleven percent reported that they applied for their last mortgage completely online. When asked what factor would have improved the mortgage process, approximately 40 percent of homeowners indicated they would have liked a faster process with fewer delays. Twenty percent indicated that a shorter, easier to understand application would be preferable, while 11 percent asked for more communication with their lender throughout the process.
The half and half solution, doing some of the process online and some in-person, was most popular with millennials (30 percent). Still, 28 percent of Generation X and 20 percent of baby boomers opted to go this route as well.
When going through the mortgage process, homebuyers are looking for speed, security and simplicity. Millennials and women both think security is the most important factor, while Generation X and baby boomers looked for speed. All cited simplicity as a big help.
“There’s no question that technology is playing a larger role in the home buying experience,” said Joe Tyrrell, executive vice president of corporate strategy at Ellie Mae. “As we expected, many homeowners are seeking a faster and more streamlined experience. And it’s not just a millennial phenomenon; it’s homebuyers of all ages and both genders.”
“But what’s even more telling is that homeowners still want a personal interaction with their lender. They want someone who can answer important questions, and make them feel confident that everything will be handled correctly and on time. While 27 percent of millennials identified the speed of the process as the top area to improve their experience, surprisingly 23 percent cited more face-to-face interaction as the second-greatest opportunity for improvement. By leveraging technology, lenders can provide a more high tech experience to simplify and speed the overall process, while still having the high-touch interactions when and where homebuyers want,” Tyrrell added.