How Is The Home Loan Process Adopting Digital Technologies?

The ‘digital home loans’ are on the rise to make the process of home loan smooth with easier online access to an online mortgage broker.

Some lenders are offering online home loans which are applied through a mortgage broker, but besides the contract of sale, the physical paper documents are not needed in the home loan process.

Digital home loans have an array of features such as electronic ID checks, virtual VOI, e-signatures, online property valuations etc. They also offer more competitive rates than traditional banks.

The home loan application is moving into the digital age as a result of COVID-19. Neobanks with a full online presence and without any physical branches are also offering home loan products.

open banking also has enabled customers to share their financial data electronically, securely and with their explicit consent.

Advantages/Disadvantages of digital home loans:

Benefits:

• Selection of suitable home loan without the need to visit the bank
• contact-free and risk-free application process
• Online documents submission
• User friendly and intuitive lender websites
• Faster, smarter and efficient banking
• Competitive interest rates on loan products
• Customer-centric banking solutions with hyper-personalized mobile apps
• Easy to switch between lenders and negotiate a better loan deal

Drawbacks:

• Can’t experience the wonder of viewing property in person
• Majority of the lenders lack user-friendly websites
• Many fraudulent and illegal websites offering home loans
• Digital banks usually loans don’t go higher than 80% LVR
• There is more preference for CAT 1/CAT 2 locations while approving for home loan
• Not available for self-employed and bad credit borrowers
• They have limited products

Technologies of digital home loans:

Online Real Estate Auctions

An online real estate auction is a natural and intuitive solution for buyers and sellers.

It’s a secure, fully compliant process that enables buyers to bid in an auction wherever they are, meaning increased buyer reach and participation, resulting in better outcomes.

A virtual auction is a valuable tool for the real estate industry designed to benefit buyers, sellers and agents. It’s a natural evolution in real estate transactions.

You can get a full picture on our online real estate auctions page about the advantages and disadvantages.

Digital Verification of Identity (VOI)

Digital home loan lenders have been using digital IDs of customers for a long time. The COVID-19 crisis has further made it easy as more lenders are accepting a digital ID provided by the client’s broker.

Process:

• Step 1: Send a photo or scan of your ID document like a passport or driver’s licence to your broker.
• Step 2: Join the video call with the broker so that they can confirm your true identity. The broker will save a screenshot of you holding up your photo ID.
• Step 3: Receive the result of the assessment after the broker confirms whether the ID document is genuine.

Along with the digital VOI, more lenders are accepting the use of e-sign signatures on application forms and mortgage documents.

These developments have paved a path for property owners to be able to complete their mortgage application and sign without having to leave home to visit a bank branch.

E-signatures

Digital home loans use “e-signatures” to process and write the loans virtually. Banks which are entering into the digital space are focused on introducing more digital technologies to enable remote writing of loans.

E-signatures are used on bank statements, credit checks, and other necessary documents for the home loan process. The improved use of credit files is also pushing towards a new reality where a lot of supporting documents are not required to get approved for home loans.

Desktop Property Valuations

The way property valuations take place is also changing. While lenders still require in-person valuations for some properties, the digital valuations are becoming more common.

Desktop valuation is a process where a computer algorithm assesses the value of a property. It is a tool to analyse an online valuation by using publicly-available information such as the size of a property and its location.

This feature helps to prevent borrowers from the trouble of coordinating times with the valuer and letting them into the property.

You can read our page on desktop valuation for frequently asked questions and processes.

Online Mortgage Calculators

Most online mortgage calculators are either outdated, inaccurate or don’t fully answer your questions.

So we have designed our calculators to give you a better insight into how banks will view your home loan application.

Our calculators can help you to be well informed before you start the home loan process.

You can read our page on mortgage calculators to see which calculators are available.

Contact us today!

More Australians use a mortgage broker to obtain their home loan than any other method.

We have adapted our systems and processes to support customers online with the features of digital home loans. We can quickly find you the best mortgage from one of the major lenders that we are accredited with.

Our experienced mortgage brokers can help to guide you through the process and can quickly work out which banks can offer you the best interest rate, terms and conditions.

Complete our free assessment form or call us on 1300 889 743 to speak with a mortgage broker.