A new report has confirmed the trend for greater demand for online mortgage applications as usage of mobile devices rises.
Fiserv, a global fintech services firm, finds that almost two thirds of people who have applied for loans in the past two years now do so either partially or fully online, representing a marked increase from 2018.
This increase has been predominantly driven by smartphones and tablets.
The survey discovered multiple takeaways about the expectations and behaviours of today’s consumers, who generally expect to be able to do most things on their digital device.
Specifically on home loans, increases in the use of mobile devices includes:
- 9% of consumers read loan documents provided by the lender on a mobile phone or tablet, up from 10% in 2019
- 16% of consumers uploaded documents requested as part of the loan approval process via a mobile device, up from 9% in 2018
- 21% received their loan application decision via their mobile device, up from 11% in 2018.
There was also an almost-doubling of the use of mobile devices for initiating home loan payments in 2019 (35%) compared to 2018 (18%).
“Today’s borrower seeks a differentiated experience via any channel they choose, and they are increasingly comfortable completing loan applications through mobile devices, including their phones,” said Byron Vielehr, Executive Vice President and Senior Group President, Fiserv. “Consumers have come to expect easy mobile experiences, and providing holistic, integrated digital lending capabilities helps lenders meet borrowers' changing preferences.”
Comfortable using digital
Respondents are generally comfortable with using mobile devices or laptops for completing mortgage applications – 71% said so compared to 67% in 2018.
This increase is notable for mobile devices with the share of those saying they are somewhat or very comfortable completing a home loan application this way rising from 29% last year to 41% in 2019.
Using digital mobile wallets for mortgage payments has also seen an increase with 24% interested in this, up from 13% a year ago.
Connecting to a representative
Despite the thirst for online applications for mortgages and other loan types, the survey also reveals concerns.
Screen size (56%) and security concerns (51%) are the main barriers to mobile loan applications, although there are options that would make consumers more likely to complete the loan process via a smartphone or tablet.
The main things that those who would not use a mobile device to complete a loan application, 22% say improved website security would make them more likely to complete the loan process via a smartphone or tablet.
Interaction with a representative remains an important option with 17% saying access to a representative online would persuade them to apply online. This was up 8 points from a year ago.
And the option to pause an application and continue in person with a representative would sway 16%, a six-point increase from 2018.
Respondents said that they would happily speed up the application process by signing documents on their mobile device (67%), taking pictures of a loan document to upload online (61%), or allowing the lender to verify identity by uploading a selfie via their mobile device (57%).
Satisfaction with lenders
After interest rates (50%) and fees (39%), customer service and lender reputation are reasons for choosing a lender, with 37% and 29% respectively giving those as reasons behind choosing a lender.
The majority of borrowers (69%) are satisfied with their home loan process. Among the 31% who report not being fully satisfied, 51% say the process took too long – a 17% increase from 2018. Additionally, 46% say there was too much paperwork involved.
Poor customer service (46%) and changes to the interest rate or terms (41%) are given as the leading reasons why consumers abandoned a home loan application, while the number who have stopped a loan that was in process due to the lender asking them for the same document twice has doubled from 2018 to 36%.
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