With the increased use of digital tools, the mortgage process looks much different today than it has for previous generations. Whether you are applying for a new home loan or refinancing your current mortgage, these new technologies can make the process more efficient, but it is important to understand how your information is being used throughout the process.
As the housing finance industry continues to modernize its processes, some lenders have adopted digital mortgage underwriting tools that make the application process more efficient by accepting electronic loan documents. In many cases, electronic loan documents can facilitate a faster, easier process for both you and your lender.
Why Do Lenders Use Digital Mortgage Tools?
Lenders have traditionally relied on printed documentation that requires them to manually review your application before deciding if you qualify for a loan and, if so, how much and on what terms. This can be a time-consuming process.
Digital mortgage underwriting tools allow lenders to expedite the process by using electronic documents and automation to more efficiently evaluate loan applications. Freddie Mac research has found that these tools can decrease the loan origination timeline and may also save you money in closing costs.
What Information Will My Lender Ask For?
The criteria that your lender will evaluate will not change, but the way you provide documentation may be different. For instance, you may be asked to provide access to digital accounts, such as your bank account, instead of providing printed documentation.
Specific requirements may vary by lender — some may prefer a fully-digital process and others may use a combination of print and electronic documents. Talk to your lender to get a better understanding of their loan application process.
What If I’m Not Comfortable Providing My Information?
Keep in mind the information you provide to your lender will be the same whether you use digital or printed documents, it is only a difference in how your lender accesses your information. In fact, digital documents often provide a higher level of security than printed documents.
If you still prefer not to share digital access to your personal information, your lender should understand your concerns and be willing to work with you on an alternative. If not, you can find a different lender who is willing to accommodate a more traditional loan application process.
In either scenario, you should always take steps to ensure your personal information is protected and remain vigilant against potential fraud.
Last reviewed: September 19, 2024
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