How AI mortgage lending is transforming the home loan process

The mortgage industry is being transformed by artificial intelligence (AI) and machine learning, turning a slow, paper-laden mortgage process into a fast, borrower-friendly experience.

Lenders across the mortgage industry are starting to use AI to automate underwriting, assess risks, and support borrowers in new ways. For every borrower, this shift in the mortgage industry means a simpler mortgage process.  

At the front of this revolution is Better, a mortgage lender that harnesses AI and machine learning to redefine the mortgage process for borrowers.  

How is AI being implemented in the mortgage industry?

At Better, artificial intelligence and machine learning aren’t just tools, they’re the backbone of a streamlined mortgage process for borrowers. That's why we built our proprietary loan engine, Tinman, as well as the first voice-based AI Loan Assistant for the U.S. mortgage industry, Betsy. 

Tinman is our behind-the-scenes technology that handles the full initial underwriting process. Basically, it reviews and processes the key details of your application quickly and accurately.

Then there’s Betsy, fully integrated with Tinman, who’s like your 24/7 mortgage assistant. She doesn’t just gather your info, she can answer your loan questions anytime, pre-approve you, deliver personalized rates, lock them in, and even guide you through the homebuying process while keeping your application on track.

This system lets our loan consultants focus on the more personal, complex parts of your journey, so you get the support you need, right when you need it

Automated application processes

AI helps mortgage lenders speed up processing and loan approvals dramatically.

Better’s powerhouse loan origination engine, Tinman, completes the entire initial underwriting process autonomously, eliminating delays like appraisal conditions and approving loans days faster than traditional methods.

This kind of efficiency is starting to grow more common across the mortgage industry as lenders look for ways to streamline loan processing.

Using optical character recognition (OCR) technology, these systems convert scanned financial statements, tax returns, and pay stubs into usable text data. Machine learning algorithms then analyze borrower data, credit scores, and employment history, enabling instant lending decisions through automated underwriting systems that may start to mirror the speed and precision Tinman delivers.

Fraud detection

Mortgage fraud attempts surged by over one-third between 2022 and 2023, making robust fraud detection essential in the mortgage industry.

AI-powered systems excel at identifying suspicious activities, such as unauthorized applications or identity theft, that might evade traditional lender reviews, using advanced pattern and behavior analysis.

Modern fraud detection tools can:

• Detect signs of identity fraud by flagging unusual application patterns
• Identify discrepancies linked to third-party tampering or misrepresentation

For borrowers, AI-driven fraud detection means greater protection against financial risks.

Cutting costs and time

When it comes to home loans, time is everything. That’s why Betsy harnesses advanced generative AI to streamline the mortgage application experience while traditional lenders rely on slow, outdated processes that demand time and manpower.

Better has built tech to simplify everything, cutting costs for us so we can pass the savings to our borrowers. Our tools, Tinman and Betsy, team up to make your mortgage faster and more affordable. 

We've got the numbers to back it up: Better's fulfillment cost is 35% lower than industry average, and Better Loan Consultants are over three times more productive than the industry median¹.

(Interested in how Better makes money? Learn here).

Beyond competitive pricing, our technology creates a seamless process, giving you control every step of the way.

Customer service

Many financial organizations now use artificial intelligence for chatbots, voice assistants, and other conversational tools. These AI-powered systems handle simple questions and give quick answers.

Because Betsy is powered by Better's proprietary loan engine, she is more than just a voice assistant. Betsy can tap into your full mortgage application to provide tailored, accurate, and nuanced responses to your questions, saving you the time and headache from waiting  to talk to a representative. 

Betsy is so much more than a conversational tool. In fact, she has taken a HELOC application, approved a customer, provided a rate, and locked a rate — an interaction you can listen to here.

Because AI virtual assistants like Betsy act as the first point of contact, she works hand-in-hand with Better's human loan consultants to take care of the administrative tasks so your consultant can focus on what matters most: delivering the best financial product for you and your goals. 

The challenges of AI in mortgage lending

While there is growing excitement about automation, AI mortgage lending can create wider worries about having too much technology in financial processes.

The biggest problem for lenders is the complexity of adding AI to their systems. Lenders who haven't adopted AI or machine learning technology face several challenges, like higher costs. But as lenders explore integrating AI and machine learning into their technology, data security has become a bigger concern.

Unlike traditional mortgage industry processes, where your information gets scattered across separate systems like sales tools, customer databases, and pricing engines, Tinman keeps everything about your loan application in one unified, secure place.

Think of it like a well-organized filing cabinet that Betsy can instantly understand. This setup gives Betsy the full picture of your mortgage needs without compromising data security. 

In all, the best solution combines AI's speed with human expertise. Industry experts call this "increased intelligence" rather than full automation. That is how Better designed Betsy to work with loan consultants.

Addressing potential AI mortgage risks

The quick growth of artificial intelligence in mortgage lending brings risks that need careful handling. Data privacy stands as a major challenge because AI systems process so much sensitive borrower information. Banks and lenders must protect this data with proper opt-ins and opt-outs that ensure customers agree to how AI uses their information.

Lenders must create clear rules to use AI responsibly and assess their models for fairness and bias. Building trust in mortgage artificial intelligence requires emphasis on openness, security, and responsibility as these technologies grow.

At Better, we’re focused on managing AI risks while making the mortgage process better for everyone. Our AI assistant, Betsy, handles data collection for loan applications, cutting down on human errors that could mishandle or misrepresent your information, a point we’ve underscored in the way we pair innovation with a strong commitment to security.

Meanwhile, our core system, Tinman, uses a centralized design with built-in encryption, offering better data protection than older, manual methods.

We’re fully compliant with regulations like GDPR and CCPA, but what drives us most are solutions like Betsy and Tinman that deliver security, transparency, and responsibility as we use AI to reshape mortgage lending.

The future of AI in mortgage lending

AI mortgage lending is more than a passing trend. It represents a fundamental change in mortgage processing.

Mortgage companies like Better, who are ahead of AI adoption, must continue to balance state-of-the-art technology with human expertise.

While adopting AI becomes necessary to deliver a faster, more affordable experience, success lies in combining technological efficiency with human judgment. This approach creates a more responsive, secure, and customized mortgage experience.