The end of the mortgage workhorse: Adapting to a new lending ecosystem

"From 2008 to 2020, the mortgage market was characterized by a relatively narrow range of loan products, or so it was presented to most potential borrowers. Lenders all too often guided borrowers toward specific mortgage types, prioritizing institutional risk mitigation over individual borrower optimization. Cash-out refinance loans were pushed instead of home equity products. Traditional or ARM mortgages took precedence over renovation products."

"Over the past few years, however, the real estate landscape has changed dramatically. Today's borrowers are more informed and digitally savvy. They're also increasingly seeking more personalized financial solutions. The era of paternalistic loan recommendations is now all but obsolete. Borrowers today have access to sophisticated comparison tools, transparent online resources, and a wealth of information, empowering them to make more educated decisions. Lenders, in turn, are pivoting to serve them accordingly."

Mortgage lending has shifted from a narrow, standardized set of post-2008 products toward diverse loan portfolios and advisory relationships. Lenders historically steered borrowers into FHA, VA, cash-out refinances, or ARMs to reduce institutional risk, often prioritizing lender protection over individual borrower optimization. Today's borrowers are more informed, digitally savvy, and expect personalized financial solutions. Technological innovation, changing consumer expectations, and a deeper understanding of borrower needs are driving lenders to expand offerings — including home equity and renovation options — and to position themselves as financial advisors providing tailored consultation.

Read at www.housingwire.com