Study Says Older Borrowers Are Loan Shopping Online
While more Americans are applying online for their mortgage, it is not just the younger generation that is using the computer to get their next loan. A study conducted for Mortgage Marvel, a rate quote service owned by D+H Mortgagebot, found that of the more than 650,000 first-lien loan applications submitted online last year, 35% came from someone aged 50 years or older.
By age bucked, 22% of the sample were aged 50-59, 10% were in their 60s and 3% were 70 or older.
On the other hand those between 30-39 and 40-49 each had 22%, while between 19 and 29 had 13% (the low number for this group is more likely because they are not typically ready for homeownership and thus not seeking loans in the same proportions the other age segments are).
The similarity across the 30s, 40s and 50s groups shows the growth in all segments regarding the use of computers and the ease with which anybody can apply for a mortgage online, he said.
More than three-quarters of those applications from the 50 or older group were for refinancings and 24% for purchases. Overall it was 61% refi, 39% purchase. For the 30s group, it was 52% purchase and 48% refi, and for the 19 to 29 group it is 79% purchase.
A similar study looking at 2011 applications showed 34% of those submitted online came from someone 50 or older.
The consistency in the data, said Rick Allen, chief operating officer of Mortgage Marvel, indicate that the entire market is getting more and more comfortable with doing large financial transactions.
While originators do not need to set up their websites any differently to meet the needs of older users, Allen added, “it stresses the need for universal usability, which is something that we spend a lot of time thinking about” at both Mortgage Marvel and Mortgagebot.
So a site needs to be “intuitively clear the first time somebody” uses it, especially because applying for a mortgage is not an everyday event.
“From my perspective, whether you are 22 or 72, you ought to be able make your way through that process pretty easily,” he said.
Seniors are comfortable with the simplicity of a system like Mortgage Marvel, where they don’t need to do more than know about the type of property, the value of the property and the loan amount, all items they are familiar with, he pointed out. Mortgage Marvel pointed to a Pew Research Center sruvey, which shows 56% of those over 65 and 83% of those 50 to 64 use the Internet.
Consumers should get a system where it is easy to use. They are able to enter their data and the system figures out what all the pricing is.
Still, online shopping for and applying for a mortgage is not for everybody because sometimes there are special situations involved. But a relatively clean transaction and some familiarity with the loan process makes it easy to do a loan online, he noted.
There were fewer applications involved in the 2011 study. Allen said there has been steady growth in the number of consumers willing to search for and get a mortgage online.