Homebuyers Expect Digital Mortgages, But Also Want Human-Touch Communication, 2018 Ellie Mae Borrower Insights Survey Finds

As the industry embraces digital mortgages, the annual Borrower Insights Survey from Ellie Mae® (NYSE: ELLI) found that nearly two-thirds of Americans expect to be able to apply for a mortgage and complete the application online. The results from the annual survey of over 3,000 homeowners and renters were revealed today at the annual Ellie Mae Experience conference. Ellie Mae is the leading cloud-based platform provider for the mortgage finance industry.

The 2018 Ellie Mae Borrower Insights Survey found that homeowners went high-tech and human-touch when they applied for their last mortgage. Sixteen percent applied for their loan completely online while 45 percent of homeowners completed the process entirely in-person. Thirty-seven percent leveraged a combination of an online application and in-person interaction.

The survey also found that the concept of a digital mortgage starts before and extends beyond the application process. Nearly one-third of all homeowners surveyed (31 percent) said they conducted mortgage research online before they applied. In fact, one-in-five homeowners (21 percent) found their lender through an online search. Following the application, 19 percent of homeowners used an online resource for loan origination and eight percent used one after closing the loan.

The use of online tools cut across all generations. Seventy percent of Millennials used an online application process for all or some of their last mortgage, as did 55 percent of Gen-Xers and 43 percent of Baby Boomers. Homeowners who used an online application overwhelmingly felt it improved their experience (93 percent).

Interestingly, even though Millennials were most likely to use technology, they were also the most likely group of homebuyers to want more interaction with their lender. More than one-third of them (37 percent) said more face-to-face interaction and more communication with their lender would have improved their last mortgage application experience.

"The trend toward online is a great opportunity for mortgage lenders," said Joe Tyrrell, executive vice president of corporate strategy at Ellie Mae. "As lenders embrace a true digital mortgage, borrowers will get the benefit of both a high-tech process to make things go faster, and a human-touch experience, providing transparency and building their confidence. A true digital mortgage that encompasses all aspects of the process enables lenders to dedicate their resources towards building valuable relationships with borrowers and guiding them through the process, instead of spending time clicking buttons or validating data. High-tech and human-touch are equally important."

What's keeping renters from buying?

The Ellie Mae Borrower Insights survey also explored what is keeping renters out of the housing market. One of the biggest reasons is a misconception about what it takes to qualify for a mortgage loan.

More than one-third of all renters (36 percent) say they are doing so because they have not saved enough money for a down payment. In fact, more than half of Millennials (52 percent) cite the lack of a down payment as the biggest factor preventing them from buying a home.

While it's true some renters may not have enough money saved to purchase a home, the survey identified an opportunity to educate renters about what is needed to qualify for a mortgage loan today. For instance, almost half (49 percent) of all renters believe they would need a down payment of 20 percent or more. One-in-three renters (34 percent) think they need a credit score in the 700-749 range and another one-in-three renters think they need a credit score in the 750-799 range.

"Surprisingly, almost half of the renters surveyed said that they thought they needed to put down a larger down payment than necessary to be able to purchase a home," said Tyrrell. "With the range of loan products available today, including FHA loans, this simply is not the case."

More data from the 2018 Ellie Mae Borrower Insights Survey is available in an e-book at https://www.elliemae.com/borrower-insights/2018

Methodology

Ellie Mae surveyed 3,006 individuals between the ages of 18 and 70 using the Qualtrics Insight Platform and a panel of homeowners and renters provided by Qualtrics panel services. The survey was fielded from November 13 – 19, 2017. Ellie Mae defines generation bands as Millennials (born 1980-1999), Generation X (born 1965-1979) and Baby Boomers (born 1946-1964).

News organizations have the right to reuse this data, provided that Ellie Mae, Inc. is credited as the source.

About Ellie Mae

Ellie Mae (NYSE:ELLI) is the leading cloud-based platform provider for the mortgage finance industry. Ellie Mae's technology solutions enable lenders to originate more loans, reduce origination costs, and reduce the time to close, all while ensuring the highest levels of compliance, quality and efficiency. Visit EllieMae.com or call (877) 355-4362 to learn more.

© 2018 Ellie Mae, Inc. Ellie Mae®, Encompass®, AllRegs®, the Ellie Mae logo and other trademarks or service marks of Ellie Mae, Inc. appearing herein are the property of Ellie Mae, Inc. or its subsidiaries. All rights reserved. Other company and product names may be trademarks or copyrights of their respective owners.

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