Homebuyers Expect High Tech–But Also Want Human Touch

John Naisbitt first developed the concept of “high-tech, high-touch” in his 1982 bestseller Megatrends. He theorized in a world of technology, people long for personal, human contact.

More than 35 years later, Naisbitt’s theory holds up in a survey by Ellie Mae, Pleasanton, Calif. The company’s annual Borrower Insights Survey found homeowners went high-tech and human-touch when they applied for their last mortgage. Sixteen percent applied for their loan completely online while 45 percent of homeowners completed the process entirely in-person. Thirty-seven percent leveraged a combination of an online application and in-person interaction.

Ellie Mae executive vice president of corporate strategy Joe Tyrrell said homebuyers expect digital mortgages, but also want human-touch communication.

“The trend toward online is a great opportunity for mortgage lenders,” Tyrrell said. “As lenders embrace a true digital mortgage, borrowers will get the benefit of both a high-tech process to make things go faster, and a human-touch experience, providing transparency and building their confidence. A true digital mortgage that encompasses all aspects of the process enables lenders to dedicate their resources towards building valuable relationships with borrowers and guiding them through the process, instead of spending time clicking buttons or validating data. High-tech and human-touch are equally important.”

The survey also found the concept of a digital mortgage starts before and extends beyond the application process. Nearly one-third of all homeowners surveyed (31 percent) said they conducted mortgage research online before they applied. One-in-five homeowners (21 percent) found their lender through an online search. Following the application, 19 percent of homeowners used an online resource for loan origination and eight percent used one after closing the loan.

Ellie Mae also reported use of online tools cut across all generations. Seventy percent of Millennials used an online application process for all or some of their last mortgage, as did 55 percent of Gen-Xers and 43 percent of Baby Boomers. Homeowners who used an online application overwhelmingly felt it improved their experience (93 percent).

However, although Millennials were most likely to use technology, they were also the most likely group of homebuyers to want more interaction with their lender. More than one-third (37 percent) said more face-to-face interaction and more communication with their lender would have improved their last mortgage application experience.

The survey also explored renters’ views of the housing market finding misconceptions about what it takes to qualify for a mortgage loan. More than one-third of all renters (36 percent) said they are doing so because they have not saved enough money for a down payment. More than half of Millennials (52 percent) cite the lack of a down payment as the biggest factor preventing them from buying a home.

Tyrrell noted while it’s true some renters may not have enough money saved to purchase a home, the survey identified an opportunity to educate renters about what is needed to qualify for a mortgage loan today. For instance, nearly half (49 percent) of all renters believe they would need a down payment of 20 percent or more. One-in-three renters (34 percent) think they need a credit score in the 700-749 range and another one-in-three renters think they need a credit score in the 750-799 range.

“Surprisingly, almost half of the renters surveyed said that they thought they needed to put down a larger down payment than necessary to be able to purchase a home,” said Tyrrell. “With the range of loan products available today, including FHA loans, this simply is not the case.”

More data from the 2018 Ellie Mae Borrower Insights Survey is available in an e-book at https://www.elliemae.com/borrower-insights/2018. Ellie Mae surveyed 3,006 individuals ages 18-70 using the Qualtrics Insight Platform and a panel of homeowners and renters provided by Qualtrics panel services. The survey took place in November.