Homebuyers Rely on Digital Lending during the Coronavirus Pandemic

Homebuyers Rely on Digital Lending during the Coronavirus Pandemic

As per the survey, 73 percent of consumers choose their lender based completely on interest rates but acknowledge that time-to-close is the biggest problem in the lending process. In fact, consumers have different expectations on closing timelines from what financial institutions see as realistic.

FREMONT, CA: New research from Finastra reveals that while rates remain consumers' key driver in the mortgage lender selection process, trends associated with COVID-19 have put increased importance on time-to-close and digital experience. The pandemic is influencing both of these trends, as consumers demand more resilient digital loan processes and rising volumes of mortgage applicants extend time-to-close.

In a survey of 301 consumers and 34 financial institutions, conducted in July and August 2020, these surveyed groups offered their views on expectations around the mortgage process and also an insight into how consumers select their lenders.

"Our survey results confirm that the pandemic has had an immediate impact on the mortgage industry that will continue to reshape the market for months to come," stated Steve Hoke, General Manager, Mortgage, Origination and Analytics, Finastra. "How financial institutions respond now will determine their competitiveness as consumers adopt a more virtual lending model."

As per the survey, 73 percent of consumers choose their lender based completely on interest rates but acknowledge that time-to-close is the biggest problem in the lending process. In fact, consumers have different expectations on closing timelines from what financial institutions see as realistic. Its survey indicated that the majority of consumers expect to close in 15 to 30 days, with 37 percent expecting a three to 15-day time to close. And because of increased volumes and historically low rates leading to part from the pandemic, the average close time is actually getting longer. A bank's capability of competing with non-traditional lending services on close time could protect and also expand their mortgage business moving forward.

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