MBA Premier Member Editorial: Lenders Take Note–The Technology Buyers Want to See

Rajshekar Prabhakar serves as Vice President of Data Science at ServiceLink, where he leads transformative initiatives leveraging artificial intelligence and data-driven solutions to enhance efficiency in the mortgage industry.

Today’s buyers want to see a wide array of technology offerings provided by their lender. In fact, they have come to expect it. They are busy and looking for increased transparency in the process, flexibility to make progress on their own schedule and desire the convenience to make decisions at home from the comfort of their own couch.

Lenders who offer digital scheduling for appraisals and closing, virtual closing options and a wide range of AI tools and technology offerings will likely see more borrowers come their way.

ServiceLink recently surveyed 1,526 individuals who either purchased a home or tried to purchase a home within the last four years and asked them about the benefits of technology when implemented in the homebuying process. These homebuyers or prospective homebuyers were clear that they want to see more technology in the process, and it even impacts what lender they choose to work with.

For those surveyed, the biggest benefit to using technology in the mortgage process was the convenience of use (59% of respondents said they like this the most), along with time savings (51%), flexibility to make progress on their own schedule (45%), transparency in the process (36%) and potential cost savings (31%). A lot of this can be linked to machine learning and its influence on the process.

A Desire for Automation

When asked what would influence a borrower to want to work with a specific lender, it was clear that they want to see technology infused into nearly every aspect of the homebuying process. When broken down by generation, Gen X–or those born between 1965 and 1980–were the most interested in seeing technology used by their lender. But all generations were in agreement: they would select their lender based on technology offerings.

Perhaps this is because they know a lender that is using technology and machine learning is going to be faster, more efficient and have convenient offerings across the board. Borrowers know their time won’t be wasted playing phone tag trying to track a person down, when they can schedule digitally right at their fingertips.

Other technology that recent homebuyers said they relied on throughout the process included electronic applications (55% of respondents used this tool), scheduling their appraisal or closing appointments digitally (35%), conducting their closing appointments remotely (27%) and using a chatbot or virtual assistant to answer questions (11%).

When asked what technology offerings would sway them toward a specific lender, once again scheduling an appraisal or closing appointment digitally was a strong desire (76%), along with virtual closings (68%), a fully digital process with no in-person appointments (66%), using a range of AI tools and technology (66%) and having the option to use AI chatbots that completes paperwork using their individual responses (53%).

eSigning Is Taking Off

We have seen a big increase in the last few years in those looking specifically at hybrid signings–where the majority of the documents can be signed whenever, from wherever the borrower chooses, with only a few documents left to review in person. Respondents to the State of Homebuying Report agreed that this is an important offering, with 62% saying they eSigned documents during their recent homebuying process. Interestingly, baby boomers had utilized this option the most, with 70% saying they leveraged this technology during the homebuying process. Overall, usage of eSigning technology was up, from 48% who responded they utilized it just two years ago.

With today’s buyers focusing on convenience, time savings and flexibility, this makes sense. Even from personal experience doing a hybrid signing, I liked having the option to sit in the comfort of my home and go through documents at my own pace. eSignings give more control to the end user. They can do research and take their time to get through the documents on their own schedule.

Lenders Also Benefit From Automation

For lenders, automating the process can relieve a lot of headaches that arise during the auditing processes. When the process is automated, lenders can easily track changes made to documents, helping with quality control. Instead of printing out more than 150 pages, having them signed in person, then scanning each document to log changes and ensure all signatures were made, these checks are automatically taken care of when the process is automated. There’s less room for error–a hard copy of a paper won’t accidentally get left out or a document wrongfully switched.

An automated borrowing process truly is beneficial to all parties. It saves time for the borrower, the lender and mortgage servicer organizations who work behind the scenes with the lender.

Instant Scheduling Is Hot

While only 35% of respondents who recently purchased a home said they scheduled their appraisal or closing appointment digitally, 76% of all respondents indicated they want to see this as an option, allowing them to use a phone or tablet to schedule at the date and time they desire. This is an option that more lenders need to make available to their clients, because it is wanted by the borrower and can help save time and money.

Instant scheduling saves time and headaches for the consumer. There are no back-and-forth calls, waiting for a person to answer, simplifying the overall process and improving the borrower experience. From the survey results, it is clear more borrowers want to have this as an option.

To Chatbot or Not

While only 11% of respondents who purchased a home in the last four years said they utilized a chatbot or virtual assistant to answer questions throughout the process, 53% of all respondents said they would prefer to work with a lender that offers an AI chatbot to complete paperwork. This tells us that homebuyers want to see chatbots incorporated into the process, they just haven’t had the option.

With a focus on AI, I have watched chatbots and similar tools improve exponentially over the last two years. Today they are smarter and more intelligent and can get things done faster. These are not your chatbots of the past, where the technology offerings weren’t always up to par. Since 2023, chatbot capabilities have greatly improved. While regulations and laws still are being set to guide the process, this is an area that lenders should explore. Using chatbots to handle calls would save lenders money, while still keeping humans around to field calls that need escalation.

(Views expressed in this article do not necessarily reflect policies of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes submissions from member firms. Inquiries can be sent to Editor Michael Tucker or Editorial Manager Anneliese Mahoney.)