Over the years we have seen some tremendous advances in technology that have allowed the world to transform into a new digital age. While it is now common to shop on apps like Amazon, consumers are seeing new opportunities to use mobile applications to manage their personal finances. A Q1 2016 Fannie Mae survey shows a spike in the amount of low and moderate income homebuyers taking an interest in mobile mortgages, with prior research suggesting an even larger appetite among higher income consumers. With this in mind, it’s fair to say that we are currently undergoing a huge shift in the market.
Lenders such as Sofi and Quicken have aligned their technology with consumer demand, but the data suggests that all mortgage lenders need to place an emphasis on the mobile experience for consumers.
According to the 2016 survey, 64% of the people questioned had completed some form of mortgage activity on a mobile device, while 72% said that they would use it if it is available in the future. Twelve months prior, only 27% had used a mobile device for a mortgage activity, while 37% expressed an interest in doing so in the years to come. With future interest in mobile mortgage technology exceeding current usage, the opportunity is clear for lenders - especially considering its heavy use by the college educated and first-time homebuyers.
Figure 2. Current usage and future interest for mobile activities across home research and mortgage activities. Home Research Activities Q: Have you ever done this using a mobile advice? / Mortgage Activities Q: Would you like to do this using a mobile device in the future?
To break down the survey numbers further, about half of the low and moderate income recent homebuyers felt that online sources were as influential as lenders. Also, about half are interacting with their lender using a mix of online, phone, and in-person channels, while the other half are using only phone and in-person.
Heading into 2017, many mortgage lenders are starting to respond to the demand and developing mobile applications. Because consumers place so much emphasis on their online user experience, lenders must ensure that they are offering the best possible platform. As technology continues to evolve, exciting new opportunities will present themselves, adding efficiency and enhancing the mortgage process. New technology players will emerge, redesigning current roles and processes. Lenders have traditionally held the most influence with consumers, but technology could change all that. Those with the foresight to anticipate this technology paradigm shift will align their processes with consumer sentiment and win.
