5 Key Borrower Insights Lenders Need to Care About
by Thomas Lin
With interest rates stable over the past few months, steady origination volumes are keeping lenders busy. As they try to grab market share, it is important for them to address what borrowers are looking for.
- Online engagement, an important factor for Borrowers
According to the survey, 50 percent of borrowers responded that they choose their lender based on whether they offered an online application or portal. Borrowers are also demanding more communication with the lenders throughout the loan origination process. Likewise, a majority of borrowers who were not offered online or electronic options from their lenders would have preferred those options.
- Key deciding factors in favour of online application process
Among all borrowers, the top three reasons provided for liking the online application process were: quicker time to close (66%), a simpler application process (61%), and information more readily available (54%).
- Interaction and communication with the lender important for borrowers
Borrowers continue to show a strong desire for more options for interaction and communication with lenders. Direct communication with a lender can be especially important for younger borrowers and those who are applying for a mortgage for the first time. That way they can have their questions answered and feel reassured that the loan process is on track.
- Reasons for abandoning the online loan application
The survey showed that when borrowers fill out online applications, it is common for them to abandon the process or take multiple sessions to complete it. About one half that has used an online mortgage application finished in one sitting. About one-quarter of those that have used an online mortgage application started the application online but did not finish it.
- Strategy fine-tuning needed for millennials
As more millennials enter the housing market, it will be imperative for lenders to prioritize the use of all available technologies. With millennial borrowers using an average of more than five different methods of communication throughout the origination process, lenders need to offer a customized approach for each individual borrower.