HomeBuying 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 wentto the bank, usually between 9 a.m. and 3 p.m., and often sat for hoursfilling out mortgage application forms with information that had taken daysto 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 inthe privacy of our living room, mail it in, or drop it off at the bank'ssupermarket branch during our Sunday morning grocery trip. Obviously, agreat 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 ofways customers can apply for a mortgage. Many banks offer 24-hour phoneservice, allowing customers to complete an application over the phone. Customerswho still prefer to go to a branch now have the option of going in beforeor after work and even on weekends. Traditional banking hours have expandedto accommodate the fast-paced world of the '90s. In response to an ever-morecompetitive marketplace, most banks now offer mortgage specialists thatwill travel to the borrower's home or office throughout the applicationprocess.
Mortgages Move Into Cyberspace
It's no surprise that the next logical step for the mortgage industryis to go on-line with the World Wide Web. Much like the rest of the businesscommunity, banks are offering products and services via Web sites to theever-increasing on-line population, currently estimated at 25 million. What'ssurprising, however, is the extent of the offerings that are available.Bank Web sites provide one-stop shopping for mortgage products, 24 hoursa day, seven days a week. Mortgage applications can be downloaded, printedat home, completed and returned to the bank via fax, mail or a personalvisit. Current rates for the various mortgage options are listed and updateddaily. Web users can send E-mail messages to a bank requesting specificmortgage information or a call from a mortgage specialist.
To further simplify the purchasing decision, bank Web sites offer potentialhomebuyers the opportunity to see how different mortgage options - suchas fixed vs. adjustable mortgages - will meet their financial needs. Forexample, many lenders have introduced PC banking as an option on their Website. By answering a few basic questions about lifestyle and current financialsituation, customers are given solutions illustrating how different homefinancing options might work for them. On-line calculators demonstrate thebenefits of owning vs. renting, using an individual's current rental payment,income and tax bracket. Customers can see how much of a mortgage they canafford, what their monthly payments will be, or whether refinancing is agood option for them. All this information is offered in a friendly, easy-to-understandfashion that strips away a great deal of the mystery that formerly surroundedthe 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 tothe Web site of the city in which they're interested in purchasing a home,to discover information about the school system, local politics, communityactivities, etc. Many REALTORS are also accessible on-line, giving visitorsthe opportunity to view potential properties or leave E-mail messages forspecific agents. At certain Web sites, interested buyers can compare averageproperty values in specific neighborhoods and even obtain an estimated valuefor 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 accustomedto the one-stop shopping concept, they will expect even more Web site linkageto lead them through every aspect of the home buying process. Once securityissues are resolved, on-line mortgage applications will be widely acceptedand customers will also be able to view their mortgage statements via theWeb.
Overall, new technology has simplified the mortgage process, making itfaster and less intimidating for many potential homebuyers. Further, theinstant access offered by the World Wide Web has allowed many participantsin the home buying process - banks, REALTORS and municipalities - to linktogether for the convenience of buyers. These advances have made the 1990san exciting time to purchase or refinance a home for the technologicallyinclined.
Roberta Sydney is the senior vice president of BayBanks Mortgage Corp.,Headquartered in
Westwood, Massachusetts.