The article below is written by the best in the business in spotting trends. At Robert Floris’s office we concur with the analysis. The young generation love their mobile devices and they have certainly been the the first set of clients to experience mortgages online. Mortgages secured by the internet will continue to grow. For some mortgage brokers in Toronto, they have experienced success. There are obvious benefits, specifically time. My concern for our clients in the greater Hamilton area is Knowledge. Do they truly know what they are getting. Younger kids look at rates and why not? But many of these low rate mortgage products have stripped down features which can haunt you in the future. I am sure that these products will evolve to improve but for now as this industry grows, be careful.
March 6, 2015 Robert McLister 516
“No one wants to get their mortgage online,” I remember a veteran agent telling me when I started brokering in 2007. “People want to look you in the eye before they trust you with the biggest debt of their life.”
I wonder if that broker would say the same thing today. He definitely won’t say the same thing a decade from now.
Times can change before we know it as technology enables customers to do things online that many once thought improbable. Discover Home Loans released a recent survey that hints at how the landscape is changing. It’s U.S. data but worth a good look regardless.
The company surveyed 1,003 people and found that:
9 in 10 used the Internet for part of their mortgage process
54% have filled out one or more online applications
36% said it would be easier to get a mortgage without any phone calls or lender/broker meetings
But yet, 94% still report communicating with their lender by phone
(In Canada, “know your client” rules are not supportive of closing a mortgage with no verbal contact.)
67% still met their mortgage originator in person
47% got prequalified through a lender’s website.
Among other things, online mortgage origination is being driven by demand from self-directed millennials, professionals and busy families. More of these folks are looking for quick, convenient lower-cost mortgage solutions. And they’re starting to adapt their use of mobile devices from real estate research (where 89% of home buyers use a mobile device) to mortgage research. But it’s early days in that sense, with only 15% of online mortgage consumers accessing mortgage information from a mobile device.*
It also helps that consumers are increasingly open to emailing documentation and submitting sensitive information online:
86% of recent homebuyers felt comfortable sharing personal information online
71% said they have submitted mortgage documents via email, apps or websites
50% submitted scanned documents.
As people become less reliant on brick and mortar mortgage purveyors, several elements could drive online mortgage growth, including:
Easy-to-use online expert systems for pre-qualifying customers (Centum’s is a one early example)
Online mortgage comparison tools and advanced calculators
Electronic signing technology (it’s widespread in the U.S. but in its infancy in Canada’s mortgage market)
Web-based chat support and video chat
Online screen share and web presentation technology (both of which can facilitate full-service mortgage planning on the Internet).
These trends will spawn novel ways of servicing mortgage clients, ways that will become entrenched in our industry. And if such change is indeed on our horizon, then Malcom X said something we mortgage professionals should all live by: the future belongs to those who prepare for it today.
Robert Floris is an independent mortgage broker with Mortgage Architects in Hamilton Ontario