Online searches becoming the preferred way to find mortgage lenders

Borrowers were more than twice as likely to use a lender they found online in 2018 as they were in 2017, making search engines the mortgage industry's top source of referrals.

In Ellie Mae's most recent survey of renters and homeowners, 43% of respondents found their lenders through an online search. Others found lenders through an existing bank or lender relationship (25%), advertisements (20%), or direct mail (9%). The balance found lenders through other channels.

"Over the last few years, there's been a growing trend for borrowers finding their lender through online searches and advertisements and a declining trend for those finding their lender through direct mail and existing bank or lender relationships," Ellie Mae wrote in its Borrower Insights report.

In the 2017 version of the survey, when borrowers identified how they found their lenders using a somewhat different set of choices, the responses broke down as follows: friend and family referrals (31%), online searches (21%), Realtors (16%), other (15%), ads (7%), direct mail (6%) and email (4%).

In addition to showing borrowers are increasingly finding their lenders online, Ellie Mae's most recent survey finds half of all consumers selected their lender based on whether the mortgage company or offered an online application or portal.

But lenders are devoting less than 2% of their budget to technology, according to a separate survey of Ellie Mae's users.

The borrower survey and the Ellie Mae user survey had more than 2,000 respondents each. Marketwise Advisors conducted the user survey. Ellie Mae used the Qualtrics Insight Platform and worked with market research firms Fulcrum and Lucid to conduct the borrower survey.