Most Homebuyers Trust AI With Their Mortgage – But Should They?

Veterans United Home Loans is a registered DBA of Mortgage Research Center, LLC, an affiliate of Three Creeks Media.

"More than half of prospective homebuyers (53%) would be comfortable buying a home without direct human involvement, according to a new Veterans United Home Loans survey that reflects growing trust in AI tools and technology," says a Jun. 11 report by the lender.

The survey suggests home buyers are willing to trust artificial intelligence (AI) throughout the loan process: from finding the most competitive lender, through comparing loan options, to managing documentation and receiving guidance customized to their needs and circumstances.

"What's striking is how much trust buyers are placing in these tools when it comes to major financial decisions," said Chris Birk, vice president of mortgage insight at Veterans United, in a statement. "Their willingness to share financial information, seek personalized guidance and even consider a fully AI-driven experience suggests many consumers are becoming far more comfortable with this technology than they were just a few years ago."

A High Level of Trust

A whopping 76% of prospective buyers in the survey say they're fine using AI tools to comparison shop for their best mortgage deal. And 69% are ready to use those tools to help manage loan applications and supporting documents. Indeed, over one-third report they are very comfortable delegating that job to AI.

Meanwhile, 89% of respondents said they'd share personal financial information with a lender's AI tool, and more than two in three (68%) declared that they trust AI output on mortgages.

Is This Trust Misplaced?

We wondered whether borrowers were being too trusting. So, we asked an expert: "How wise is it to entrust AI with major financial decisions such as choosing a mortgage deal and allowing it to manage application documentation?"

"AI can be extremely useful for analyzing options, checking documents, spotting inconsistencies, and helping you understand complex mortgage terms, but I would be cautious about entrusting it with the entire decision-making process or allowing it to act without human oversight," said ChatGPT.

ChatGPT went on to identify three particular areas of weakness for AI use by mortgage applicants

1. AI might not know all the lenders' rules, policies, exceptions and discretionary areas. These can change too quickly for even AI to keep up. And that means that the deal it recommends could turn out not to be the best you can get.
2. It can be confidently wrong. "AI systems sometimes:
   
   • Misread documents.
     
   • Invent facts.
     
   • Miscalculate if given incomplete information.
     
   • Miss important legal details.
     
   This is particularly dangerous when dealing with [large sums of money]."
3. AI does not bear responsibility for its advice. Unlike professionals, you can't sue AI for bad advice. You personally are responsible if you choose to follow its suggestions.

Trust but Verify

AI is great and getting better all the time. We may well get to a time when we can trust it with an end-to-end mortgage transaction: Tell it what it needs to know, give it the supporting documentation needed as evidence of your financial claims, and turn up to closing to take possession of the home. Bliss!

However, it's not there yet. And ChatGPT recommends that borrowers use human professionals for some stages of the home-buying process.

Moreover, we suggest that borrowers verify information provided by AI. The technology still suffers from hallucinations.