The US mortgage market has seen a significant shift in borrower preferences in the past few years. Recent data indicates that borrowers are looking for lower interest rates and desired loan terms, along with relying more on technology in their loan application processes, compared to a couple of years ago. This shift in borrower preferences is driven by a number of factors, including a strong economy, low unemployment rates, and a good outlook for housing prices.
The shift in borrower preferences has been seen predominantly in the origination of mortgages, with the majority of lenders now favoring refinance mortgages over purchase loans. This suggests that borrowers are taking advantage of the historically low interest rates to refinance existing mortgages in search of better terms. The data also shows that the demand for shorter loan terms has grown significantly. Borrowers are actively seeking shorter loan terms in order to save on interest costs, as well as reduce their overall payment burden.
To accommodate their changing preferences, borrowers are increasingly leveraging technology to simplify and streamline the loan application process. Robust digital loan origination systems and apps are becoming increasingly necessary as borrowers rely more on digital platforms to apply for loans. The convenience of applying for loans over the internet, as well as options such as automated underwriting tools and electronic signatures, is driving this shift.
The data also suggests that lenders are focusing more on customer experience and offering additional products, such as digital mortgage approvals, to attract and retain borrowers. By equipping their borrowers with better digital tools and offering more products, lenders are able to continue to close loans in a timely and cost-effective manner.
Overall, the shift in borrower preferences in the mortgage market indicates that a stronger economy, low interest rates, and an improved customer experience through digital tools are all influencing the loan origination process. In order to stay competitive, lenders are having to respond to these changes and adapt their services accordingly.
You can read this full article at: https://www.housingwire.com/articles/new-data-reveals-changing-borrower-preferences/(subscription required)
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