Borrowers are going online to shop for mortgages in record numbers. According to a new report, approximately 40% of 1,000 surveyed lenders take more than 25% of their loan applications online. Further, the Benchmarks 2011 Report, from Mortgagebot LLC, found that online mortgage lenders don’t just open a new distribution channel, they capture borrowers with outstanding credit quality. The report found that online applications in 2010 had a median credit score of 757, a median household income of $90,000, a median borrower age of 42, and a median loan-to-value ratio of 70%.

The report aggregates data from Mortgagebot’s PowerSite platform, responses from its annual partner survey, and independent research. The data in total reflect more than 500,000 consumer-direct online mortgage applications submitted in 2010 to nearly 1,000 mortgage lenders.

The following were among the other trends identified:

• Mortgage shoppers actively research interest rates online—among visits to lenders’ websites, 54% were to check rates.

• Mortgage shoppers are highly inclined to submit applications online—72% of online borrowers who were eligible to complete their loan application online, chose to do so.

• Mortgage shoppers will devote time to complete online loan applications. The report revealed that more than one in six visitors spent more than 16 minutes on a lender’s website (excluding visits of less than a minute). If they don’t have enough time to complete the application, they’ll come back—48% of applications were submitted over multiple sessions and 90% of the returning users submitted their application within two weeks of starting it.

• Borrowers want to apply on their own terms. More than one in three consumers elects to apply online during nonbusiness hours, when branches are closed.

• Simple navigation increases the likelihood of capturing applications. A panel of testers took 20% more time and 24% more clicks to reach the application entry page for less successful sites. More successful sites reaped eight times more loan volume.

“In a tightened mortgage market, lenders who aggressively adopt the online channel through multichannel integration certainly gain an upper hand by providing the consumer the ultimate in consumer convenience,” notes Rick Allen, Mortgagebot’s senior vice-president of Client Services. “Lenders deploying such a platform can seamlessly transfer a partially completed online application to their call center, branch, or loan officer channel to both enhance the borrower experience and increase their application submission rate.”

 

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