Blog: Using AI To Find The Right Mortgage For You
When you’re deciding whether it’s the right time to own your own home, you need to consider your current and future lifestyle needs. Things like job security, the size of your family and overall lifestyle habits will significantly influence your borrowing capacity when you apply for a mortgage, and can generally help indicate whether you’re in a good position to buy a home.
Similarly, mortgage lenders typically evaluate a few different criteria when considering your loan application, including:
- your current income (from both employment and investments) and your typical expenses;
- whether and how much of a deposit (i.e. a down-payment) you have saved;
- how long you’ve been in your current job (more than 12 months is typically preferred by most lenders);
- the type of your employment (e.g. full-time, part-time, casual) and whether this will continue in the future; and
- the size of your family and whether you plan to have more children in the future.
Broadly, the purpose of all this information is to help the mortgage lender assess the serviceability of any mortgage they were to extend to you. More plainly, whether you can afford the mortgage or not.
Surprisingly, most mortgage lenders don’t take a particularly sophisticated approach to assessing borrower serviceability. They basically rely on the information presented by the borrower (or their broker), and at most might perform some high-level comparisons against statistical benchmarks (e.g. average family expense data released by the Australian Bureau of Statistics).
LendAI is hoping to change this. LendAI is building an innovative AI-powered platform that will make it easier for borrowers to navigate the mortgage application process, while also improving loan quality for lenders.
As LendAI is being built by a team with deep experience in retail mortgage lending — we understand the challenges and pitfalls of the current approach by lenders, and have developed novel ways to assess borrower suitability and serviceability.
Our innovative natural-language user assistant (nicknamed, Lendai) helps borrowers navigate the sometimes complex application process for a mortgage. Lendai is omnichannel and built to interact with digital native borrowers on whichever channel they prefer (including web, mobile, voice, and social channels like Facebook and Telegram). Rather than filling out complex documentation, Lendai allows the same information to be captured in a more streamlined, borrower-friendly, and natural way.
Once borrower information has been collected, our proprietary borrower assessment algorithms help to determine borrower suitability and serviceability for different mortgage products. This is done by analysing information collected from individual borrowers against our custom mortgage statistical database. Our database begins with several statistical sources including ABS and private survey data, and is then modified by our proprietary lending suitability factors based on our team’s deep expertise in mortgage lending. Further, we use market-leading machine learning practices to ensure that every application LendAI performs helps improve our algorithms and models.
These unique front- and back-end factors allow LendAI to more accurately assess borrower’s capability to service a home loan product and ensure that applications to banks and financial institutions are more likely to be approved.
LendAI is currently available in beta at LendAIapp.com and will be progressively rolled out across a variety of digital channels.