THE FUTURE OF CREDIT: MORTGAGE AND LENDING TRENDS TO WATCH

More lenders will factor non-traditional data like rent payments, utilities, phone bills, education and streaming services into credit decisions to fuel financial inclusion across 2024, 2025 and the years ahead. The practice provides alternative views of reliability for thin-file consumers. As machine learning models prove predictive power of new datasets, credit bureaus expand incorporation. Regulation is also becoming supportive to spur responsible innovation.

Accelerating Digital Mortgages and Closings

Fully digital home loans closing in under 3 weeks will become mainstream circa 2025 as eMortgages and RON platforms hit inflection point after pandemic-era volumes. Borrowers can now upload all verification documents online and securely eSign closing contracts eliminating in-person signing delays. Lenders reengineer backend processes to speed end-to-end digitization improving CX tremendously.

Higher Demand for Home Improvement Lending

Seeking more space, sustainability or accessibility, aging-in-place consumers will fuel rising demand for home improvement financing like bathroom additions, solar panels, in-law suites and ramps. Government incentives encouraging retrofits that cut utility costs and property tax breaks for improvements will provide additional stimulus too. Lenders launching tailored products stand to benefit.

Mainstream Adoption of Buying Homes Online

The ability to make binding offers on residential properties online will achieve mainstream adoption prior to 2025 after gaining traction with institutional investors and iBuyers. As immersive 3D home tours and digital closing solutions remove friction, consumers embrace the convenience of digitally led home purchases. That forces incumbent realtors to rethink service provision or risk disintermediation.

Climate Considerations for Mortgage Portfolios

Physical and transition climate risks will necessitate rigorous location-based home valuations and stringent catastrophe modeling to accurately price risk across mortgage portfolios. As regulators sharpen climate stress testing requirements for lenders, geospatial analytics assessing environmental exposures down to zip code-levels will shape underwriting and pricing decisions as well as overall portfolio strategy. As you can see, lots of changes are coming circa 2024 and 2025 seasons.