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Digital mortgages to enter a new, faster (and cheaper) era in year ahead

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Digital mortgages continue to evolve and could enter a new era in the coming year as lenders invest in technology. (iStock)

Over the last few years, lenders have focused on improving the digital mortgage experience for consumers, and now lenders are increasingly focusing on mortgage back-end technology to increase the speed with which consumers can move through the mortgage process. can be improved.

Next year, mortgage lenders will focus on investing in solutions that drive efficiency, said Seth Appleton, president of the Mortgage Industry Standards and Maintenance Organization (MISMO).

After interest rates hit record lows last year, there was a surge in borrowers rushing to refinance or buy new homes. While this gave lenders solid profit margins, it also didn’t give them time to improve their mortgage experience. In the third quarter of 2020, lenders averaged a record $1.4 billion per firm, according to Mortgage Bankers Association (MBA) data shared at their annual conference in Nashville. Recorded production.

Although the housing market is currently slowing, lenders can use some of last year’s profits to invest in technology. According to MBA, the top concerns for tech companies include:

  • Reduced IT costs
  • Information security
  • Choosing the right technology

“in the meantime [lenders] We’re in a different financial situation right now, and companies that are doing well and preparing for the other side of the cycle are optimizing,” Appleton said.

This optimization can speed up mortgage cycles that currently take about a month or more to complete from beginning to end.

If you’re looking to buy a home, comparing the offerings of multiple lenders can ensure you get the best product for you. Visit Credible to see personalized interest rates without affecting your credit score.

Investing in technology could bring down mortgage fees

As lenders invest more in technology, it reduces the time and cost of getting a mortgage. These savings are passed on to consumers, making it cheaper to take out a mortgage.

Investing in front-end, or consumer-facing, technology such as an online application for a mortgage is convenient, but investing in back-end technology (or the technology that facilitates the process, but that may not always be the case) is useful. According to Appleton, reducing the time it takes to pay off a mortgage or lowering costs can actually provide more benefits to consumers.

He noted that the mortgage industry has been slow to adopt technology, but the industry is making progress. In fact, the COVID-19 outbreak and stay-at-home orders have forced many lenders to seek alternative solutions, accelerating technology adoption in the industry.

If you’re looking to buy a home or refinance your current loan, consider comparing your options at an online marketplace like Credible. Visit Credible to compare multiple mortgage lenders at once and find what works best for you.

Home price growth slows, but stock levels remain high

As housing market slowdownthe rate of increase in house prices is started to decreaseBut home prices are still significantly higher than last year, with homeowners Record amount of home equity.

According to a recent Black Knight report, tappable homeowner assets, or the amount of money homeowners can access from their homes while keeping at least 20% of their assets in their homes, hit a record high for the 10th straight month. Recorded. increased to $11.5 trillion, up 5% or $500 billion from the first quarter and up $2.3 trillion or 25% from the year-ago quarter.

If you’re interested in utilizing your home equity, consider cash out refinancing. Contact Credible to talk to a mortgage expert Have all the questions answered.

Have a financial question and don’t know who to ask? Email a Credible Money Expert [email protected] Your question may be answered by Credible in the Money Experts column.

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