The mortgage process is evolving. Fewer homebuyers are meeting face-to-face with mortgage professionals and the reliance on the internet and digital documentation is growing.
That’s according to a recent Ratehub.ca survey of over 2,000 Canadians about their home buying sentiments and habits.
It found that, of those who currently don’t own a home, 71% plan to purchase one in the future; 59% plan to purchase within the next two years. Young Canadians, in particular, are drawn to the prospect: 81% of Millennials and 87% of Gen Z said they would like to buy a home.
And, according to that same survey, the way they search for and attain a mortgage will likely be different from the methods used in the past.
Canadians look online first during home search
A growing number of Canadians begin their mortgage journey online.
According to our survey, 36% of homeowners started their mortgage search by doing online research. 42% of Millennials and 41% of Gen Xers took to the internet as the first step in their buying journey.
Comparatively, 47% of Baby Boomers went directly to their respective banks as the first step in their process. Of course, it should be noted that some Boomers may not have had access to online resources when they first became homeowners.
Overall, the same number of people started their mortgage search online as did people who started by visiting their bank.
With younger Canadians set to become a large portion of the next generation’s home buying cohort, it’s safe to assume the percentage of homebuyers who begin their journey online will only increase.
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Digital documentation trends in the application process
Younger Canadians are more experienced with electronic applications than their older counterparts.
Our survey found 54% of Millennial homeowners used an electronic application for their current mortgage compared to 43% of Gen Xers and 23% of Boomers.
Face-to-face meetings during the mortgage process
“Our survey shows that when it comes to getting a mortgage, Canadians of all generations are looking for full service,” James Laird, president of CanWise Financial, said. “But that service doesn’t need to be in person; they are comfortable with electronic applications, communicating over email, and phone conversations. A human touch is still required but less and less does it need to be delivered in person.
“The number one thing people are looking for is personalized advice for their unique financial situation. The second thing is peace of mind and reassurance that they are making the best decision.”
Older Canadians are more likely to prefer in-person contact during the mortgage application than younger Canadians.
According to the survey, 39% of Millennials and 40% of Gen-Xers said they preferred to navigate the process “mostly in person.”
Meanwhile, 52% of Boomers and 64% of the Silent Generation prefer to conduct the process predominantly face-to-face.
Overall, 44% of respondents prefer to navigate the process mostly in person and 44% said they prefer to do it mostly by phone or email.
Twenty-eight per cent of respondents did not meet face-to-face with a mortgage professional at any point during the mortgage process.
Comparatively, 47% of Millennials said their preferred method of communication would be phone or email. 48% of Gen Xers and 39% of Boomers agreed.
Most said it’s important to have some contact with a mortgage professional (either in-person, by phone, or by email) at some point during the process – with 81% saying so.
Interestingly, 12% said they would like to go through the process completely independently in a self-guided manner, with no contact from a mortgage professional.
Technology is changing the way Canadians attain their mortgages. Home buyers are increasingly conducting research online and spending less time meeting face-to-face with mortgage professionals. More and more documents are being submitted electronically and communication is often done either digitally or over the phone.
In the future, it’s likely the reliance on technology will continue to grow for those buying a home. Still, some will likely to continue to have their concerns.
“While there is a growing comfort and trust with electronic applications, trust, and data security worries are the number one issue slowing down the adoption of electronic applications,” Laird said. “Large data breaches have recently been very prevalent in the news; until that stops, there will be some apprehension among many Canadians to embrace electronic applications.”
A sample of 2,050 Canadian residents from were surveyed by Ratehub.ca from Sep. 24-Oct. 31, 2018 as part of Ratehub.ca’s 2018 Mortgage Survey. For more information about our survey findings or to set up a media interview please email Aashti Vijh ([email protected]).
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