The mortgage application process has undergone some changes due to the advent of digital technology. Buying a home online is a much more convenient and accessible way to purchase a home when compared to meeting someone in person.
Data providers and third-party software providers work around the clock to streamline the mortgage application process. Digital ecosystems should be modernized to attract new clientele.
Technological affinity is a must to better serve millennials and Gen Z-ers who will shape the mortgage industry over the next several decades.
Mortgage Trends to Watch Out for in 2022
One of the trends this year is to get people to say yes/have their applications successfully processed as soon as possible.
The analytics involving home appraisals has shifted towards virtual appraisals. Appraisers will need to increasingly turn to data sources, such as property photos, videos and virtual tours to reduce the turnaround times on property evaluation and help them operate more efficiently.
You will also be seeing an increase in instant buyers in 2022. Also known as ‘Cash Home Buyers’ Instant buyer levels dropped during the beginning of the pandemic, but you can expect an upswing in their numbers in 2022, thanks to the dissemination of vaccines and the relative weakness of Omicron when compared to previous strains.
Blockchain is also something to keep a close eye on. While blockchain-the innovative tech that underlies cryptocurrencies-has not gone mainstream as far as mortgages are concerned, there is still great potential to look forward to in the upcoming months, as interest in alternative payment methods has never been higher or seen as more acceptable in society.
The usage of open banking is also to keep close tabs on in 2022. Open banking refers to the system that allows for the control and access of financial accounts and banking via third-party apps.
Automation will also play a strong role in the mortgage industry, as artificial intelligence helps promote autonomy while expediting the application process. Moreover, expect a sharp increase in the use of data science to predict rate changes.
That is, expect an increase in macroeconomic forecasting in 2022 and beyond. Getting the best mortgage rate becomes more feasible when you take advantage of mortgage trends this year.
Future Opportunities in the Mortgage Industry
Expect more strategic investments by IMBs in 2022. More mortgage firms will consider combining production business lines in 2022. You can also expect them to offer more complimentary lending products this year.
Mortgage production can also be increased by targeting the millennial demographic, as many millennials are ready to buy homes in 2022.
Real estate investment trusts serve as yet another opportunity, as new mortgage real estate investment trusts may serve as a production outlet for certain mortgage firms. Furthermore, you can expect an increase in collateral valuation in 2022.
The pandemic made in-person evaluations impossible in many parts of the world. Desktop appraisals became the norm, and the speed and convenience may make them the new gold standard going forward.
Loan underwriting technological changes will also allow mortgage underwriters to process up to four times as many loans per day. The goal is to enable data to be moved back and forth between systems seamlessly and to be able to validate said data virtually.
Major Challenges The Mortgage Industry Needs to Overcome
Processing needs to be rapid while not sacrificing efficiency in the process. Lenders often also struggle with finding qualified specialists who can competently finish the pre-underwriting process.
Lenders also need to formulate a sound business plan to create a scalable team that is also cost-effective. Outsourcing may allow lenders to maximize workforce scalability by scaling resources according to their needs at any given moment.
Compliance needs also need to be adhered to. Filing mounds of paperwork and working with legal authorities can be arduous and time-consuming.
100% compliance can only be assured when a lender partners with a reputable mortgage professional with a proven track record of success.
Bringing Your Game Face
Digital improvement in the mortgage industry requires mortgage companies to thrive. The pandemic and the increase in tech-savvy buyers have necessitated a paradigm shift in the mortgage industry.
Buyers want convenience, speed, and efficiency wrapped into one concise package. Companies will need to focus on offering their clients a more digital-centric experience.
Legacy processes in the realtor and mortgage lending industry will need to be reimagined to adhere to the zeitgeist.
As millennials make up the largest portion of the real estate market in 2022, lenders and realtors will need to shift their priorities and resources toward placating this key target demographic.
Sources
The surprising future of mortgage technology – HousingWire
5 Tech Trends That Will Move Mortgages And Housing Markets In 2022 | Bankrate
Open Banking Definition (investopedia.com)
Three tech trends that will transform mortgage lending – HousingWire
Mortgage Industry Trends, Opportunities, Challenges in 2022 (mossadams.com)
Biggest Challenges in Mortgage Processing Services (expertmortgageassistance.com)
Tech trends shaping the mortgage industry in 2021 | Mortgage Professional (mpamag.com)
