To first answer this question, we need to break down the differences between the traditional mortgage application process and the online mortgage application process. The traditional mortgage application process is long and cumbersome. Customers need plan out the entire weeks-long application process before they even start the process. After that, the customer in a traditional application process needs to meet with lenders in person multiple times and send over physical copies of sensitive paperwork. In addition to that, there is manual underwriting done at each step of the process plus checking to make sure all the regulations are being properly met. When this is all done, the proper forms are packaged and sent off to a bank, all to get an approval in principle for a mortgage.
The online mortgage application process is entirely different. Instead of being a long and tedious process, the mortgage application can be completed in minutes-not weeks. Instead of having to meet with lenders multiple times in person, they can just have a meeting over the phone or through a video-conferencing tool. All the manual underwriting is taken care of by technological automation processes, which shaves days if not weeks off the time the process takes to complete. Additionally, the automated process checks to make sure all the regulations and mortgage procedures in the mortgage process are properly followed. The use of an automated process instead of manual underwriting and regulation-checking significantly cuts down on the cost of mortgage origination. When it’s all said and done, the forms are packaged and sent off to a bank electronically to get an approval in principle for a mortgage.
This comparison shows that the online mortgage application is more efficient, faster, and less expensive then its traditional mortgage application counterpart. That’s not the only reason people are more likely to apply for a mortgage application online. There’s also the ease of shopping for a mortgage online as opposed to in person. Traditionally, people would need to go to each mortgage lender in person to find out their mortgage costs. Nowadays people can just look up mortgage lenders online to find out what each lenders’ mortgage cost is. This way customers can find the right mortgage in their price range faster than if they used the traditional process. In conclusion, the online mortgage application’s streamlined process combined with their ease of shopping for mortgages is makes people more likely to shop for a mortgage online rather than in person.
This article was written by Ian, an intern for Irish Mortgage Brokers and Yes.ie from the USA.