Buying a Home- 90's Style

by Roberta Sydney, BayBanks Mortgage Corp (now BankBoston)

When people bought homes in the '60s, '70s, even the '80s, they went to the bank, usually between 9 a.m. and 3 p.m., and often sat for hours filling out mortgage application forms with information that had taken days to gather. They then went home and waited, sometimes as long as 30 days, to hear from the bank. Today, you and I can sit down at our PC or laptop, download a mortgage application from the World Wide Web, complete it in the privacy of our living room, mail it in, or drop it off at the bank's supermarket branch during our Sunday morning grocery trip. Obviously, a great deal has changed in the mortgage industry over the past 20 years.

Meeting the Convenience Demand

Clearly, the biggest change in the mortgage industry is in accessibility. In response to consumer demand for convenience, there are now a number of ways customers can apply for a mortgage. Many banks offer 24-hour phone service, allowing customers to complete an application over the phone. Customers who still prefer to go to a branch now have the option of going in before or after work and even on weekends. Traditional banking hours have expanded to accommodate the fast-paced world of the '90s. In response to an ever-more competitive marketplace, most banks now offer mortgage specialists that will travel to the borrower's home or office throughout the application process.

Mortgages Move Into Cyberspace

It's no surprise that the next logical step for the mortgage industry is to go on-line with the World Wide Web. Much like the rest of the business community, banks are offering products and services via Web sites to the ever-increasing on-line population, currently estimated at 25 million. What's surprising, however, is the extent of the offerings that are available. Bank Web sites provide one-stop shopping for mortgage products, 24 hours a day, seven days a week. Mortgage applications can be downloaded, printed at home, completed and returned to the bank via fax, mail or a personal visit. Current rates for the various mortgage options are listed and updated daily. Web users can send E-mail messages to a bank requesting specific mortgage information or a call from a mortgage specialist.

To further simplify the purchasing decision, bank Web sites offer potential homebuyers the opportunity to see how different mortgage options - such as fixed vs. adjustable mortgages - will meet their financial needs. For example, many lenders have introduced PC banking as an option on their Web site. By answering a few basic questions about lifestyle and current financial situation, customers are given solutions illustrating how different home financing options might work for them. On-line calculators demonstrate the benefits of owning vs. renting, using an individual's current rental payment, income and tax bracket. Customers can see how much of a mortgage they can afford, what their monthly payments will be, or whether refinancing is a good option for them. All this information is offered in a friendly, easy-to-understand fashion that strips away a great deal of the mystery that formerly surrounded the mortgage process.

Lenders aren't the only organizations offering home buying convenience. With the push of a button, Web users can go from a lender's Web site to the Web site of the city in which they're interested in purchasing a home, to discover information about the school system, local politics, community activities, etc. Many REALTORS are also accessible on-line, giving visitors the opportunity to view potential properties or leave E-mail messages for specific agents. At certain Web sites, interested buyers can compare average property values in specific neighborhoods and even obtain an estimated value for a specific property in which they are interested.

A Glimpse into the Future

So what lies ahead for the mortgage industry? As home buyers grow accustomed to the one-stop shopping concept, they will expect even more Web site linkage to lead them through every aspect of the home buying process. Once security issues are resolved, on-line mortgage applications will be widely accepted and customers will also be able to view their mortgage statements via the Web.

Overall, new technology has simplified the mortgage process, making it faster and less intimidating for many potential homebuyers. Further, the instant access offered by the World Wide Web has allowed many participants in the home buying process - banks, REALTORS and municipalities - to link together for the convenience of buyers. These advances have made the 1990s an exciting time to purchase or refinance a home for the technologically inclined.

Roberta Sydney is the senior vice president of BayBanks Mortgage Corp., Headquartered in
Westwood, Massachusetts.

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