Bank of America rolls out digital mortgage

Bernadette Starzee//May 8, 2018

Bank of America rolls out digital mortgage

Bernadette Starzee//May 8, 2018

A home for sale in Boise. About a third of Americans surveyed by Bank of America say they would be comfortable applying for a mortgage online, using a mobile device. Photo by Anne Wallace Allen.

Homebuyers are increasingly likely to perform some or all aspects of the search and transaction online – including applying for a mortgage.

In fact, despite the significant amount of money involved, about a third of Americans (32 percent) indicated they would be comfortable applying for a mortgage via a mobile device, according to Bank of America’s recently released 2018 Homebuyer Insights Report. That doesn’t approach the levels in which Americans book trips digitally – 76 percent of respondents said they are comfortable booking travel online – but it’s higher than the comfort level for online dating: only a fifth of respondents said shopping online for a mate was in their comfort zone.

With online adoption continuing to grow, Bank of America rolled out its Digital Mortgage Experience application last week. The app, which was test-marketed among BOA employees prior to the national launch, guides users through a streamlined questionnaire in which many items are auto-populated. Many applicants receive a conditional approval for their mortgage the same day.

Users can choose between a variety of options, such as a 30-year loan versus a 15-year loan, and whether the rate will stay fixed or become adjustable after seven years. They can opt to lock in a rate or leave it open till later, and, once the application is submitted, they can track its progress, upload documents and review and acknowledge disclosures from their mobile device.

As more home buyers flock to the internet, the time was right for the launch, said Bob Donovan, who works in Manhattan as a divisional executive/senior vice president for Bank of America.

“The growing consumer confidence in digital is obvious when you look at the transformation of the real estate industry,” Donovan said. “Multigenerational buyers – baby boomers, gen X’ers, gen Y’ers – have come to adopt digital as part of the home-buying and home loan-shopping experience.”

Nearly three-quarters (71 percent) of respondents to the Homebuyer Insights Report said they would use a real estate app or website for some part of the home-buying process. Nearly half (48 percent) said they would take video tours of a home, and a small amount (4 percent) would even make an offer on a home based on what they see online.

Among first-time homebuyers, 98 percent said technology would be used to perform research during the home-buying journey, while 94 percent said it would play a role in getting a mortgage.

“We know every day, more and more customers are seeking a digital solution to different banking services,” Donovan said, noting that customers have adopted digital means as their preference for a number of banking transactions.

The Digital Mortgage Experience has far fewer questions than the 130 that appear on traditional mortgage applications, Donovan said.

Further, “many items auto-populate,” he said. “For instance, why should someone have to fill in their address if they already have an account with us and we have their records?”

Despite the convenience, a digital mortgage is not for everyone. Among those who said they would not go the digital route, the biggest reason given – by 62 percent – was that they would rather work with a person. The second biggest barrier, security concerns, was cited by 41 percent of respondents.

“People like the combination of high-tech and high-touch,” Donovan said. “They like the convenience of being able to shop for and complete a mortgage online, but they want to be able to talk to people who are experts on the subject.”

With BOA’s new product, users can click or call for assistance from a lending specialist at any point in the process, and they would be assigned to the same lending specialist for follow-up inquires, Donovan said.