As the Federal Reserve continues to keep mortgage interest rates low, the housing marketing continues to be sizzling hot. With that, more and more Americans are applying for mortgages or refinancing, taking advantage of these record low interest rates while they still can. While buying a home can be a stressful experience, the mortgage origination process no longer needs to be an uphill battle.
From pre-approval from a lender, to underwriting and to finally closing, more and more borrowers are seeking a digital mortgage origination process for a smoother, less stressful experience. And for lenders, automating the mortgage origination process needs to be just as efficient and frictionless as it is for homebuyers. In this blog, we’ll highlight the entire digital process so you can understand the benefits it unlocks throughout your entire organization.
1. Lead Management
The first step in the digital mortgage origination process is lead management. Identifying and attracting leads, especially before your competitors, is easier said than done. Lead generation tactics range from traditional methods such as cold calling and direct mail to newer methods such as social media, email, lead purchase, forging referral partnerships, and using technology to bring it all together.
With a digital mortgage origination process, you should have the tools that allow you to easily manage all of your leads, whether you’ve purchased them, ran a digital campaign, or received referrals—and whether you’re working on the go from your smartphone or sitting at your desk on your computer. By streamlining your sales pipeline with digital tools, you can keep qualified leads flowing in, nurture them with the right content, track your activities, leading to higher application and conversion pull-through. No more chasing leads that aren’t qualified, and no more missed opportunities.
2. Pre-Qualification & Application
Borrowers shouldn’t need to physically go to an office in order to apply for a mortgage, especially with the extent that the COVID-19 pandemic has accelerated digital transformation. Pre-qualification is an important part of the homebuying journey, in which a lender collects basic financial information from a borrower in order to estimate how much house they can afford. Homeshoppers typically need a pre-approval letter to show to a realtor or seller as proof that they’re working with a lender, and are real and able to do the deal.
If a home buyer has a purchase offer accepted, they need to respond quickly. Making the application process easy for borrowers is crucial. Whether you offer an app a borrower can download to their mobile device or a portal on your website, empowering the borrower with self-service capabilities, will help them best meet their digital needs and expectations. And guess what, happy borrowers equal referrals for you the lender, easily with a couple clicks on the borrower’s phone.
3. Collecting Documents
When you think of applying for a mortgage, mountains of paperwork might come to mind. From copies of your last two months’ worth of bank-account statements and paycheck stubs to your last two years of income-tax returns and W-2 forms, lenders need a slew of documents to verify that borrowers can afford the monthly mortgage payments. 3 If a home buyer has a purchase offer accepted, they need to respond quickly. Making the application process easy for borrowers is crucial. Whether you offer an app a borrower can download to their mobile device or a portal on your website, empowering the borrower with self-service capabilities, will help them best meet their digital needs and expectations. And guess what, happy borrowers equal referrals for you the lender, easily with a couple clicks on the borrower’s phone.
Instead of printing all of their checking and savings statements from the last two months, fumbling around with uploading & downloading docs, clumsy email attachments, unfriendly and unreliable web “customer” portals, or photocopying their driver license (or worst yet taking a picture and sending unencrypted over a text message), borrowers should be able to simply upload and digitally submit documents, including from their phone This saves borrowers from the stress and hassle of gathering all of these documents in a clumsy and time-consuming way. With a digital process, you can provide a task list that your borrower can simply and quickly satisfy during the application process.
By implementing a digital mortgage origination process, lenders can offer a modern experience to both borrowers and their entire lending team. After borrowers submit the necessary documents and financial information, digital tools help the lender manage their pipeline of deals, engage with borrowers, and reduce manual touch points with seamless automation to collect all the information for each task. With efficiency driven by automation to get more work done with less effort, borrowers receive consistent status updates, alerts, and notifications so they feel confident every step of the way, resulting in high customer satisfaction. Lenders get more loans closed, with less effort, and as a result, make more money in the process.
Lenders processing and submitting loans to underwriting for final approval should also have a seamless workflow by using the right digital tools. Rather than sifting through piles of paperwork reviewing a mortgage application, or downloading and reformatting, and re-uploading financial docs, loan processors can easily verify the information all in one place, approving with a single click. If any information is missing, the loan processor can digitally alert the borrower to request any missing pieces. This allows loan processors to keep everything moving quickly and smoothly so the underwriter can give final approval on the mortgage.
5. Finalize & Close
Mortgage lenders who are able to offer their customers a seamless digital experience can achieve faster closing (turn) times, higher pull through, and more referrals from higher customer satisfaction: “A happy customer tells 3 people; an unhappy customer tells 10 people”. With the right digital tools, lenders can grow their revenues, increase margins, and decrease risk. Throughout the entire digital mortgage origination process, loan officers can create more productivity and accuracy through smart automation, providing their borrowers with improved loan quality and an amazing experience they can’t wait to share with their friends and family.
StreamLoan helps mortgage lenders attract more applicants, provide a better applicant experience, and automates collaboration among lenders, borrowers, real estate agents, and other process origination participants. StreamLoan offers mortgage lenders a private-label app delivered as a mobile-first B2B SaaS workflow platform to automate the end-to-end process. Learn how our platform can drive value to your top and bottom lines by requesting a demo today.