Interest in Online Applications Continues to Grow

A recent survey of credit union online members showed that while about only about one-fifth used an online mortgage application for their most recent mortgage, the majority would be likely to use one in the future. The study, which included credit union online members who had refinanced or purchased a home in 2001/02, provides information on some of the barriers that credit unions face in convincing members to use the less costlier online channel for mortgage loan applications.

 
 

A recent survey of credit union online members showed that while about only about one-fifth used an online mortgage application for their most recent mortgage, the majority would be likely to use one in the future. The study, which included credit union online members who had refinanced or purchased a home in 2001/02, provides information on some of the barriers that credit unions face in convincing members to use the less costlier online channel for mortgage loan applications.

For their next mortgage application, the majority of respondents (58%) said they would be likely to use an online application. About one-fifth said they would not be likely to use an online mortgage application. Those respondents who gave a rating in the middle of the scale, or weren’t sure represent an opportunity for the credit union to use marketing to persuade members to try this channel.

Members also provided feedback on the ways that credit unions could convince them to use an online mortgage application. They perceived the main advantages to be flexibility in terms of completing the application, ease of use, and quicker processing. A critical aspect of the online application process appears to be customer service, in terms of reassuring members that their application was received and in process, as well as updates on the progress. Some of the member’s comments illustrating these issues are shown below:

“If the application was complete and did not require much follow up by institution, I don’t want to apply twice.”
“I like the convenience of working at home and just filling out the paper work.”
“It would depend on the degree of difficulty of the application - the easier, the better.”
“I do not care if the application takes place on line so long as I have access to a real person for any questions I may have.”

Credit unions should probably focus their initial efforts on persuading members who are refinancing to try an online loan application. The data does suggest that members who have already refinanced or purchased a home in the past would be more likely to complete a mortgage application online in the future. Almost twice as many refinancers (18%) had used an online mortgage application for their most recent mortgage, compared to only 10% of the first time home buyers.

“I would complete the loan process via the internet if I was familiar with the lending institution.”
“Having been through the process, feel more comfortable with not needing someone to walk us through it.”
“Since I've been through the process in person, I feel like I understand it better and could go online next time.”

Some of the credit unions we’ve talked to with more successful usage of online applications have implemented features such as providing email updates, the ability to update application information online, and providing the name of someone to contact information for the member’s loan processor. These features help dispel concerns that their loan application has not been received, and reinforce the personal aspect of the transaction.
Survey findings are based on a recent online survey of 13,666 credit union members from across the U.S. as part of Callahan & Associates’ Survey Consortium, a shared cost survey group consisting of 19 leading credit unions nationwide. The survey was placed on the websites of participating credit unions in October/November 2002.

For further information regarding this survey or Callahan’s Survey Consortium, please call (800) 446-7453 at or click here.

 

 

 

Dec. 9, 2002


Comments

 
 
 
  • Excellent information! You're doing great work!!
    Anonymous