Are home buyers growing complacent with advances in AI?

Cloudvirga, a subsidiary of Stewart Information Services Corporation, has announced the results of a consumer survey that highlights the growing digitization of the front end of the mortgage origination process and the growing expectations of homebuyers for an even more automated digital experience.

The survey asked recent homeowners, most of whom were first-time buyers, a series of questions about their experience during the mortgage application and closing process, including their perceptions of using the technology, artificial intelligence (AI) and automated communications.

Cloudvirga’s research, conducted in September 2024, surveyed more than 1,000 recent homeowners nationwide who had purchased or refinanced their home in the past two years. More than three-quarters, or 76%, of participants were first-time homebuyers.

The survey found that most participants expressed satisfaction with the digital experience provided by lenders and would expect even more automation in future mortgage transactions. And while they are comfortable with the online and self-service aspects of the current origination process, respondents raised serious concerns about the use of artificial intelligence in mortgages. This poses a challenge for the industry as lenders explore when and how to implement new digital solutions.

“Despite the perception that the mortgage industry is lagging behind in terms of technology adoption, our survey found that lenders are increasingly using digital tools to better engage with borrowers – and it’s clear from this research that borrowers are embracing the improved automated and less manual experience,” said Maria Moskver, CEO of Cloudvirga. “That said, they are concerned about the role of AI in this process. Our survey results reinforce the growing consensus that homebuyers are becoming more tech-savvy and expect the mortgage process to reflect seamless digital experiences that find in other parts of their lives.”

Improved satisfaction

The majority of respondents (71%) indicated they were very satisfied with the technology provided by their lender to manage the application process. When asked how they responded to the lender’s online support, more than a quarter (27%) said they were somewhat satisfied and 67% said they were very satisfied. It’s worth noting that more than 75% of respondents were first-time buyers, meaning they didn’t have a prior benchmark against which to compare their experience. In addition, respondents skewed younger: 74% of respondents were 40 or younger, a demographic clearly more comfortable with digital technology.

What does the future hold?

The majority of respondents (63%) would have preferred their experience to be even more digital than it already was, and 77% of respondents expect their next mortgage or refinance to be fully digital.

Acceptance of AI

Despite consumer support for automated technology in the mortgage process, respondents expressed reluctance when asked specifically about AI, with 60% of respondents saying the use of AI in the process of loan would make them select another lender.

The importance of a human touch

Cloudvirga found that loan officers still play a dominant role in the mortgage process. And while there is satisfaction with digital processes, still the majority of respondents (58%) said their loan officer handled the initial application process for them, a percentage that is expected to decrease as more digital tools increase full self-service options. Nearly half (46%) said their loan officer contacted them directly by phone or email when additional information or supporting documents were required. Given the overall level of satisfaction with their mortgage process, which still involved loan officers in both the application and the ongoing document procurement process, this highlights that while consumers are anxious to adopt technology, they still want the ability to rely on human assistance when needed.

Efficiency throughout the process

Most respondents said they had access to technology that allowed them to receive real-time updates on loan status (69%), automatic document delivery (72%) and access to useful tools such as e-signatures (52 %), who have contributed. for smoother and faster transactions. Respondents reported overall satisfaction related to document submission and management, 91% said they used a system to complete and upload all required documentation, 92% said they were somewhat or very satisfied with the process of sending the documentation.

“The survey results highlight an important nuance in consumer expectations during the mortgage process,” Moskver added. “They want the ease and efficiency of automated platforms and an easy user interface for borrowers, but they still rely on the involvement of loan officers. Clearly, while artificial intelligence is a component every biggest blow to digital mortgage origination, it’s still not a system of trust for many borrowers Lenders need to be cautious about how they develop their digital experience, borrower first, taking a measured approach that satisfies the consumers wherever they are. Finally, as a technology company laser-focused on the consumer mortgage experience, these findings drive our ongoing development efforts.”