Mortgage Basics

How AI will Influence the Mortgage Industry

How AI will Influence the Mortgage Industry
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  • Tvine
| Feb 3, 2023
Reviewed, Mar 28, 2024
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    By now, you’ve probably already heard of ChatGPT, the revolutionary AI tool that’s taken the world by storm. ChatGPT and Artificial Intelligence (AI) in general are poised to revolutionize the way we do a lot of things and mortgages are no exception. In this blog post, we’ll explore how AI is beginning to shape the mortgage lending space and provide an overview of why it’s a major game changer for those entering the home-buying market. So if you’re wondering what role artificial intelligence in mortgage lending might play in your future as a homeowner, read on!


    Key Highlights

    • AI tools have the capacity to automate and improve the mortgage application process, through added speed, security, transparency, and savings.
    • Mortgage lenders can use AI tools to better assess risk when processing client applications. 
    • Borrowers can use AI tools to find the most competitive offers and secure a mortgage faster than ever.

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    What is Artificial Intelligence (AI)?

    Artificial intelligence (AI) is a broad term referring to computer systems designed to mimic the thinking process of humans. This can range from machine learning, which focuses on the development of computer algorithms that can learn and perform tasks without specific programming, to deep learning, which utilizes artificial neural networks that loosely simulate the human brain in order to identify patterns in data or predict outcomes. AI has an increasing number of applications today; for example, it’s used in facial recognition software, machine vision technology, natural language processing systems and machine translation tools. AI is certainly a game-changing technology that is rapidly revolutionizing our modern lives.

    Machine learning

    Machine learning is a type of artificial intelligence technology that enables computers to learn and make decisions without explicit programming. This form of machine learning allows systems to automatically identify patterns and make predictions, adapting as new data becomes available. Machine learning has become increasingly important in a wide range of industries, allowing organizations to accurately predict customer behaviors, automate manufacturing processes, and increase productivity while reducing costs. 

    Deep learning

    Deep learning is one of the most revolutionary developments in artificial intelligence and machine learning. Essentially, deep learning is the process by which systems use data sets to learn how to detect patterns and identify complexities within large datasets – all without having to be explicitly programmed. It’s a very powerful tool that has enabled machines to learn many tasks at an incredible rate of accuracy and speed that was previously impossible with traditional machine learning approaches. 

    How will Artificial Intelligence (AI) Impact the Mortgage Industry?

    1. Impact on Customer Service

    AI has the potential to drastically improve customer service by understanding customer needs and expectations more accurately than ever before. For starters, AI mortgage services can provide customer support on a 24/7 basis. By utilizing AI-powered customer service bots in combination with human customer service representatives, customer issues can be addressed more quickly and effectively as well as improved customer retention long-term. AI solutions have the capacity to analyze customer data much faster than humans and provide individualized solutions that better meet customers’ needs. This capability decreases customer frustration and increases customer engagement and satisfaction. 

    2. Impact on Cybersecurity

    As computer systems become increasingly sophisticated, cybersecurity becomes more of a concern. By incorporating AI, cybersecurity threats can be detected faster and prevented more efficiently. AI can collect and analyze data much quicker than humans and detect anomalies which could indicate a cybersecurity threat before it even occurs. This can allow cybersecurity experts to quickly take action to protect systems from attacks such as malware or phishing scams. AI also makes it possible for enterprise systems to continually monitor security and automatically adjust without manual intervention.

    3. Impact on Mortgage Technology Services

    The mortgage industry is no stranger to changes and advancements, and today, artificial intelligence (AI) is playing an increasingly important role in mortgage services. AI technologies are helping mortgage lenders gain a competitive edge by streamlining or automating mortgage processes. From data processing to mortgage loan origination and underwriting, AI mortgage services can now interpolate vast amounts of customer data to produce insights that mortgage lenders use to make decisions more quickly. Machine learning algorithms also play a pivotal role in risk assessments, allowing mortgage brokers to pre-qualify their clients faster and automate time-sensitive mortgage processing tasks. By reducing the time it takes to process applications and containing costs for manual labour, AI technologies are providing mortgage lenders with a wealth of opportunities for improved efficiency, quality outcomes, scalability and profits.

    4. Impact on Mortgage Underwriting

    AI enables underwriters to analyze potential borrowers’ credit background and financial stability at an unprecedented speed, reducing the time it takes for underwriting decisions from weeks to just minutes. Therefore, it reduces labor costs and builds efficiency that creates a streamlined process for home buyers. While banks historically underwrote every loan manually to ensure accuracy, AI underwriting increases financial institutions’ ability to ethically opine on the risk level of each mortgage applicant in an effort to reduce their risk and mitigate fraud or mistakes. AI is finally bringing increased access, speed and accuracy for lenders engaged in underwriting mortgages.

    5. Impact on Mortgage Borrowers

    AI algorithms are often used to expedite and enhance the borrowers’ experience when they apply for a mortgage. On top of this, AI-assisted chatbots enable borrowers to access information or even start the loan application process at any time directly from their phones. By marrying traditional procedures with modern technology, AI is helping borrowers receive better rates in a fraction of the time it would normally take. Ultimately, AI is making it easier than ever before for borrowers to achieve their financial goals while also getting the best rate available.

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    Applying AI to Mortgage Lending

    AI could improve so many different aspects of the mortgage lending process. AI mortgage lending can benefit both the lender and the borrower through speed, security, transparency and savings. There are a lot of opportunities to incorporate AI into mortgage lending, so here are some existing potential solutions all throughout the mortgage process, from start to finish!

    The Future of AI in Mortgage Lending

    Mortgage approvals could become a lot faster. Lenders have to verify your employment, income, debts, and assets, which in some cases, can take up a lot of time. However, by using data from credit bureaus and other sources, AI-powered software could quickly verify your information and approve your loan in a matter of minutes.

    You may be able to get a lower interest rate. AI could help lenders to better assess risk and offer lower interest rates to borrowers who are less likely to default on their loans.

    You may be able to get a bigger loan. AI could help lenders to better assess borrowers with high debt-to-income ratios and offer them larger loans.

    Mortgage fraud could become more difficult. AI could help to combat fraud by identifying patterns that are often associated with fraudulent activity. For example, if someone is trying to get a mortgage with false information, AI might be able to flag the application faster and prevent the loan from being approved.

    The mortgage industry could become more competitive

    The mortgage industry is already highly competitive, but AI could make it even more so. That’s because AI-powered software would allow new lenders to quickly enter the market and offer borrowers lower interest rates and fees. This could lead to more choice for borrowers and ultimately drive down the cost of borrowing.

    The Emergence of Chat GPT and Its Function in the Mortgage Industry

    AI tools like ChatGPT can easily disrupt the mortgage industry in all the best ways. For one, ChatGPT can allow mortgage brokers to offer more efficient customer service and provide a personalized user experience. This includes custom mortgage suggestions based on customer inputs. In this same vein, ChatGPT can help  brokers generate leads, by learning the needs of potential customers.

    Furthermore, ChatGPT can automate the mortgage process, like prequalification forms and mortgage applications, brokers can save time and resources that would have otherwise been devoted by live agents. Additionally, customers benefit from chatbot solutions too as they can answer questions quickly and accurately, and refer customers to resources they need without having to wait in line or talk on the phone. This growing technology can revolutionize the mortgage industry, making it easier than ever before for mortgage brokers and customers to get the mortgage documents they need efficiently and quickly.

    Final Thoughts

    AI is revolutionizing the mortgage application process, making it faster, more secure, and more transparent. Mortgage lenders can use AI tools to assess risk when processing client applications, and borrowers can use AI tools to find the most competitive offers and secure a mortgage faster than ever. If you’re in the market for a mortgage, be sure to shop around and compare rates from multiple lenders to find the best deal.


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