Applying for a Mortgage Is More Digital Than Ever. So Why Isn’t It Easy?
Financial institutions have
spent years digitizing the mortgage and HELOC process. Today’s borrowers can
research products online, start applications, and even upload documents
electronically without ever visiting a branch.That is real progress. But
digital doesn’t always make the process easy.
Borrowers still lose momentum
at surprisingly ordinary moments. Maybe the application asked a question they
don’t understand, they’re not sure which document they’re supposed to submit,
or they just don’t know what to do next.
Whatever the reason, when
borrowers lose momentum, lenders can lose valuable opportunities along with
them.
Consumer Expectations Have
Changed. People are accustomed to finding information, completing
tasks, and accessing services on their own timelines. Those expectations still
exist when they apply for a mortgage or explore a HELOC.
That creates an important
challenge for lenders: How can a complex financial process feel more responsive
without sacrificing the expertise, controls, and human judgment it requires?
AI has an interesting role to
play here, but adding a chatbot to an application isn’t going to cut it.
Borrowers Don’t Think Like
Lenders. Financial institutions understandably think in terms of
applications, disclosures, documents, underwriting, closing, systems, and
workflows. But borrowers generally don’t. They think about what they are trying
to accomplish.
Can I afford this house? Why
do you need this document? Did you get my paystub? What happens next? Can I
talk to someone?
The borrower understands the
need. The lender understands the process. And that’s the disconnect that
technology has the potential to bridge.
The idea is straightforward:
let the borrower communicate naturally about what they need. Ailana can
understand the intent behind that conversation and connect it to whatever
should happen next.
Conversation Should Make the
Process Easier. The opportunity for conversational AI isn’t
to replace mortgage processes with conversation. It's to make those processes
easier to navigate.
If a borrower doesn’t
understand something, they should be able to ask. If they’re not sure what
comes next, they should be able to find out. If information is missing, the
interaction should help them resolve it. And when human expertise is needed,
technology should make that connection easier instead of creating another dead
end.
That matters in mortgage and
home equity because these are not simple transactions. They involve unfamiliar
terminology, multiple stages, significant financial decisions, extensive
documentation, and often a great deal of uncertainty for the borrower.
The Need for Help Doesn’t End
at the Application. A borrower’s need for support doesn’t disappear
once an application begins. They may have questions about gathering documents,
correcting information, or understanding disclosures, or their current
status.
Conversational AI gives
borrowers a familiar point of contact throughout the mortgage journey, while
the platform coordinates the processes needed to keep things moving behind the
scenes. That includes application and prequalification workflows, document
collection and review, borrower notifications and milestone updates,
disclosures, specialist handoffs, and digital closing.
From the borrower’s
perspective, however, the experience is simple: “I have a question. I can ask
it. I know what to do next.”
AI and Human Expertise Should
Work Together. Whenever AI enters financial services, the
conversation often turns quickly to whether it will replace employees. That
question overlooks a more useful opportunity.
Some interactions primarily
require availability, information, clarification, or help taking the next step.
Others are complex, high-value, sensitive, or simply better handled by a human.
The strongest model isn’t AI or human expertise. It is a better
connection between the two.
When technology understands
what borrowers are trying to accomplish, helps them take the next step, and
brings in the right specialist with the context intact, the human conversation
starts in a much better place.
Make the Complexity Less
Visible. The mortgage industry has done a tremendous amount of work
digitizing individual parts of the borrower journey. The next opportunity may
be making those individual parts feel less individual.
Borrowers shouldn’t have to
navigate the complexity behind the mortgage process. They should be able to
communicate naturally, get useful help when they need it, and move from
question to action with less friction.
This points to what
may be the real promise of conversational AI in mortgage lending: bringing more
mortgage and HELOC applications across the finish line by letting borrowers
communicate naturally while the technology handles more of the complexity
behind the scenes.
About Author:
Mike Hales
Founder,
CUinfulential
Advisor,
ConvergentAI
Mike is a graduate of the Lincoln University School of Law as well as the ABA School of Bank Marketing
Management and Strategic Planning at the University of Georgia, and the NACUSO/Pepperdine University
Designing and Implementing Collaboration and Business Networks certificate program. He is the author of
“The Handbook of Consumer Banking Law” © Prentice Hall and “The Language of Banking” © MacFarland &
Company.