Artificial Intelligence, or AI, has changed the landscape of many areas of our lives, such a medical diagnosing, education, and manufacturing. Technology experts explain that AI is when a trained computer is given data, and then makes decisions based upon that information. This process will change many jobs that used to be only performed by humans.
AI is changing how consumers get real estate loans. Often, a mortgage lender will offer a variety of different types of loans (FHA Home Loan, VA home loans, first-time buyer specific loans, etc) to those going through the mortgage process. With that information, the potential homeowner could decide which loan would match their particular needs. The borrower would apply for the loan, fill out forms, and bring in supporting documents. The lender would verify the information and try to catch any issues that might present a problem with the loan.
AI could be fed the borrower’s information. The borrower has to declare income and debt. They must also bring in paycheck stubs, and tax returns. This data could be absorbed and studied by AI, and if the AI found anything out of the ordinary, it could flag the issue. The mortgage lenders would be alerted, and they could find out if there were a reasonable explanation for the discrepancy. The parameters would already be set just as they are in today’s mortgage lending world. For example, if a person has too much debt, the loan process is halted. Imagine the time it takes a lender to scour that information. A computer could do the same job efficiently.
The future of AI technology in the mortgage field might have the potential borrower enter their own numbers and upload the supporting papers for AI to reference. This could save money on loan processing fees and make the loan more affordable to the homebuyer.
The AI computers may soon learn how to predict the dependability of the potential borrower. This would reduce the risks that lenders take and may bring down interest rates for low-risk clients. It would obviously save the lending institution money if the system could predict high-risk clients.
Will AI take the place of mortgage lenders and institutions? It is hard to predict. For now, we need humans to ease many first-time home buyer’s minds, and lenders are there to answer any questions. Someday, the system may be able to take all of the information, display all of the loans available for that particular situation along with the pros and cons of each one, and then process the documents for closing.