- A poll of recent homebuyers found that excessive paperwork is the biggest pain point in applying for and closing on a loan.
- Sixty-six percent of homebuyers would prefer a mortgage process that was conducted entirely online.
- Homebuyers still need human contact throughout the mortgage process, with 65 percent saying that they want a person to explain options and terms.
Most people shopping for a home loan would prefer to avoid mountains of paperwork, and Fannie Mae has plans to bring the mortgage-application process into the digital age.
In a survey of 3,000 recent homebuyers, the company found that most borrowers want to speed up the process of obtaining a mortgage to one month. Currently, Fannie Mae says that it takes a median of 35 days to close on a home loan.
When asked what could make the mortgage process easier, 27 percent of homebuyers said that reducing paperwork would be the top priority. Twenty percent of those polled would prefer a better way to shop and compare products from different lenders, while 16 percent want less exchanges with a lender before closing on a mortgage.
A full two-thirds of recent homebuyers would prefer a mortgage process that was handled entirely via the Internet. Even more — about 70 percent — would like to fill out and submit a mortgage application online. Fannie Mae notes that younger homebuyers and those in higher income brackets tend to prefer an all-digital mortgage process more than others.
Even if most homebuyers desire the convenience that would come with Internet-generated mortgages, they still need a personal touch that the digital realm cannot provide. Sixty-five percent of respondents want a fellow human to explain mortgage options and terms to them. Nearly 60 percent would prefer help reviewing and signing final loan documents.
Fannie Mae says that it is actively working with lenders of all sizes to receive online data that will help the company more quickly review loan applicants’ incomes, assets, and employment details. While Fannie Mae does not offer specifics about how its digital mortgage program will work or when it will launch, it says that it has already been able to reduce the current 35-day cycle by one week. The company’s eventual goal is to reduce the entire mortgage-application and closing process to just 10 days.