As online options grow, people still needed in home loans

The Skyline Report covering residential real estate was released recently, and it showed the housing market in Northwest Arkansas in 2020 was red hot. The number of homes sold in 2020 was the highest on record, as was the number of newly constructed homes sold and becoming occupied.

In early 2020, there was much speculation about how health guidelines might impact people’s ability to shop for a new home, sell their home or even get through the process of getting a home loan and closing. After all, these processes have historically been very personal and in-person.

But with interest rates for home loans sinking to all-time lows, everyone in the real estate and home lending industry had to adapt quickly. It forced us to become very nimble, flexible and even more technology-savvy. E-commerce was already exploding, and financial services have been leveraging digital solutions for years to give customers more self-service options at their convenience.

The mortgage process continues to evolve, however. After all, buying a home for most individuals or families is likely the largest purchase of their life.

A mouse-click here or a confirm button there can seem a little casual for such an important transaction. It’s still somewhat of a hybrid process, and for a good reason — to protect both you and the lender (the one financing, often, a large percentage of the purchase price).

Before e-commerce, as a customer, you would walk into a bank branch or call and make an appointment to see a mortgage loan officer, now known as a home loan consultant, home loan expert or mortgage lender. They would give you a loan application to take home and complete, or possibly complete it right there, time permitting. Then, an exchange of personal financial documents — pay stubs, bank statements, W2s, tax returns, etc. — would ensue.

Today, many lenders have an option to at least start your home-loan process online. But here’s where it can get tricky.

Some merely capture enough general information then revert to a bit of the olden days of talking on the phone or exchanging data and documents in some hybrid fashion of online, scan and email, or even snail mail. Some lenders may capture the entire official loan application, known as form 1003, and also allow you to upload documents instantly.

Lenders span the spectrum of technology solutions today. Still, the gaps are closing, and several technology companies are working hard to seize the market to provide the operating background for many lenders’ mobile or online applications.

However, when choosing the experience best for you, please don’t hesitate to ask about the process. Many may sound the same, and if a completely paperless experience entices you, be sure to ask the right questions and understand the pros and cons of each experience being offered.

Having someone walk you through the process helps most customers, especially first-time buyers unfamiliar with the many facets and decisions made during the home-buying process.

It’s also helpful for home loan veterans who have been through the process before, as many changes in the industry and processes have occurred in just the last few years. Having a trusted adviser explain differences can save you time and, more importantly, money.

Technology is gaining ground in the world of home loans, but it is still a critical transaction that should have plenty of human interaction in the process for your good.

Northwest Arkansas home financing was off the charts last year. Arvest was privileged to serve a record number of families through refinances and home purchases. Ingenuity, adaptability, flexibility and patience brought things together to help thousands of Northwest Arkansans take advantage of record-low mortgage rates.

Of course, the borrowers were equally nimble in adapting to a changing process, including the assistance and adoption of technology tools that were suddenly less of an option and more of a necessity to conduct business.

Like other industries, the mortgage loan world continues to learn from this past year. Everyone involved in the home loan process will come out of this with lessons learned and continue making headway toward a more efficient process for all.

Johneese Adams is a senior vice president and mortgage manager for Arvest Bank in Fayetteville. The opinions expressed are those of the author.