The Future of Mortgage Financing - Android

By Wasib Imdad  Buying a home, for most people, is a once-in-a-lifetime transaction. The advent of models and emerging capabilities… Read More

The post The Future of Mortgage Financing appeared first on .

By Wasib Imdad 

Buying a home, for most people, is a once-in-a-lifetime transaction.

The advent of models and emerging capabilities have transformed other industries and it can be said that in the home-buying industry, a digital tsunami is brewing. Nowadays, nearly every house sale somehow finds a link to loan transactions and mortgage financing.

Graana.com helps you understand the concept of mortgage financing.

What is Mortgage Financing?

Mortgage means when a person uses their property as collateral by taking a loan. This would be borrowing money against a house or taking a loan to purchase a property that is guaranteed against the same property.

All in all, a mortgage is a loan taken to buy property including a house or shop or a plot. The term can be longer or shorter but mostly mortgages average around 25 years. Until paid off completely, the loan is said to be ‘secure’ against the value of the property.

Things to know before arranging a Mortgage

When planning a mortgage, a few things you should be clear about are –

• Your budget – how much can you afford to borrow?
• Where can one get a mortgage from?
• What are the different types of Mortgage Financing?
• How does the process work?

The Future of Mortgages

Fintech innovators will throttle a more customer-focused home buying process.

Any mortgage technologist talking about the future of the mortgage industry will use two words in his conversation: ‘Automation and Big Data’. These words have been revolving around the industry for the past decade now but are still the forerunners of conversations today.

When the concept of big data first came, it was based upon the need to centralize and use information in a way that lenders run analytics to get insight into the changing needs of customers and the nature of their ever-evolving businesses.

If you are in this lending space, you must have started to imagine ways in which better services can be provided to customers who are on the brink of making the most important as well as the valuable purchase of their lives.

Factors Driving the Transformation

The transformation is being an actuality due to various advances. Technology has already made digital loans possible and popular. What is important is the access to relevant data which makes the approval of a loan, the rapid processing of that data possible.

There have been technological advances such as predictive analysis, machine learning, automation, and AI that are bringing possibilities and efficiency to the home loan process.

Likely Disruptors in Digital Mortgage

Consumers, in the current marketplace, demand more control and lucidity in their interactions with products and services. The mortgage lending process that has traditionally been very slow and cumbersome now seems to be catching up. Pakistan’s smartest property portal Graana.com brings you the likely shifts that are to be seen as waves of technology hit the shores of the real estate lending world.

New Ways for Loan Qualification

Today, records of earning and spending are used to qualify for loans. But a fact is that not everyone buys or pays for stuff on credit. The industry is seeing new changes that will help new borrowers not to get into a debt swirl and get better rates. Connecting to data from various other payment sources can show your creditworthiness in ways that your credit score (earning and spending records) cannot account for.

New Types of Mortgages

The mortgage process of today is linear. This can be intimidating to people as lenders dictate the process, terms, and conditions that make it years of compliance with the guidelines. In times to come, however, experts predict a significant shift where the borrowers will have a lot more say in the helm of affairs.

The shortage of affordable housing units and borrower demographics will push the market to discover alternatives. The terms and conditions of current loans will become far more adaptable and customizable to the borrower’s needs. Loans can be tailored to adjust to the payment schedules and timeframe that the borrower wants. Moreover, sophisticated digital processing data will be connected to various other resources that will provide better forecasts for product fragmentation and granular pricing.

An Active Ecosystem and Complimentary Services

When the digital loan gets approved, the ecosystem in which the real estate vendor resides will start suggesting properties that will be based on your interests. The apps will learn what your taste is and finding a home will become much easier. After that, home inspectors will get deep insights into your house maintenance, including that of your systems and appliances. Utilities will automatically transfer to your name, and services like cleaning will be at your door too. All the systems which had to be searched for in the older way of doing things will now be far more accessible to you, without you making the effort.

This new ecosystem requires financial institutions to claim their spot right at its center, and that needs a transformation drive from today. Due to incremental changes, the process requires a responsive enterprise to be able to adapt and will take years to complete. The organizations that adapt will take the lead, while others will find themselves falling behind as the door to future pathways opens.

Wasib is a content specialist at Graana.com

The post The Future of Mortgage Financing appeared first on .