It may be one of the biggest purchases that most people will make in their lifetimes, but financing a home doesn’t have to be daunting. Whether researching loans or importing financial data, consumers can now lean on innovative digital tools offering a major boost in security, ease, speed and control during the home-buying process.
While today’s internet-connected consumers expect to conduct almost any transaction with a simple swipe on their phones, the mortgage industry was one of the last to embrace digital tools as online commerce evolved. After the Great Recession, regulatory changes created new compliance requirements for mortgage lenders that threatened to put the industry even further behind in technology adoption.
Online lenders like Rocket Mortgage® by Quicken Loans®, however, saw an opportunity to streamline the home-buying experience with digital processes and tools. Launched in 2015, the company’s process now helps consumers get approved for a mortgage with a new level of simplicity and autonomy.
“Everywhere you look, technology is disrupting how people search for homes, how people finance homes and even how they maintain them,” says Regis Hadiaris, executive director of Rocket Mortgage®.
Overall, technology-based lenders can process online applications faster than other lenders: “Our results suggest that technological innovation has improved the efficiency of financial intermediation in the U.S. mortgage market,” states a recent report by the Federal Reserve Bank of New York.
Consumers seem to agree: In 2017, technology-enabled lenders such as Quicken Loans® provided more than half of the mortgages provided to U.S. consumers. And according to a survey of borrowers, speed, simplicity and more accessible information are top reasons for using online mortgage tools.
Controlling The Journey
It used to be challenging for prospective buyers to find customized information about how much they were qualified to borrow, what size of a down payment they needed or how buying compared to renting, says Hadiaris. They also faced a considerable burden of proof to verify their income and assets to lenders and couldn’t get approved for a loan without first connecting with a mortgage professional.
“It wasn’t a convenient process. It was unclear and a lot of times consumers felt they lacked control,” Hadiaris says.
To fundamentally change the consumer experience, Rocket Mortgage®team members reimagined the mortgage process from the ground up, first by visually mapping a consumer’s home-buying journey—right on their office walls. Staff captured steps on giant sticky notes, pasting them on walls so team members could literally walk through the home-buying process themselves, Hadiaris says. Next, the team brainstormed how to simplify and streamline those steps.
Today, Rocket Mortgage® focuses on providing a process that is quick, simple and informative. Users can access the tool 24/7, digitally import their financial data from over 95 percent of U.S. financial institutions and get their credit checked with the assurance of top-notch security. According to Hadiaris, the system relies on bank-level encryption and runs an extensive system of checks and algorithms.
Loan calculations are based on the current market, products and rates—to provide mortgage options tailored to consumers’ unique financial situations.
Hadiaris describes how Rocket Mortgage® can match the pace of the consumer: “Instead of taking a mortgage process in one big gulp, consumers can take it in little steps over time.”
These features aren’t just for aspiring buyers. Current home-owners can also leverage digital tools to refinance existing loans, lock in an interest rate or get approved with a push of a button.
A Hybrid Experience
While a significant portion of borrowers favor self-service websites when researching a mortgage, many still prefer help from mortgage professionals via phone calls, online chats, texts and emails, especially later on in the process.
Hadiaris thinks a balance is helpful: Rocket Mortgage® allows consumers to do as much on their own or with the help of a home loan expert as they wish.
“There is a misperception out there that Rocket Mortgage® is strictly a technology product and clients won’t have the help they need along the way,” Hadiaris says. “It’s really a hybrid process where they have that personal connection and expert help when they need it, but also have the technology to make the process incredibly simple all the time.”
Next up in the future of home buying? Tools will continue to improve, offering new consumer-friendly features that make a once-cumbersome process more seamless, personalized and enjoyable for aspiring buyers. Hadiaris describes new tools launched earlier this year to help clients grasp the relationship between down payment size and total cost of a potential home, for instance—yet another step toward easy insights and customization.
“People’s financial situations can be very complicated,” Hadiaris says. “Looking at all of those unique financial scenarios and how we can deliver simplicity to every single client is really our focus.”