For years, the mortgage process has been the headache step of home buying. Multiple in-person visits, stacks of paperwork, and countless signatures sometimes leave buyers overwhelmed and drained. But, even through the COVID-19 pandemic, the industry has evolved and adopted new technologies to help buyers streamline the finance side of the business.
The rise of digital purchase agreements, mortgage applications, and appraisals is reducing the amount of time and friction in the mortgage and contract processes, which ultimately speeds up the buying process, reduces costs, and allows loan officers to keep up with increased volume, among other reasons.
Two new-home mortgage leaders, Laura Escobar, president of Lennar Mortgage, and Ashley Kendrick, chief operating officer at Inspire Home Loans of Century Communities, have started to implement several digital strategies and processes at their own companies and shared the following digital mortgage process perks that could help your business in the long run.
Saves time
As one of the largest benefits, digital contracts and applications save time for both the buyer and the builder. At Lennar Mortgage, Escobar says, “We estimate just for the loan officer alone two hours of saved time, and that’s huge.” Kendrick adds that “shaving a single minute off of some of the process can have an enormous impact when you're talking very high volume and of course at a very rapid pace.”
Long-term money savings
Although new technologies can be a large cost upfront, both Escobar and Kendrick agree that establishing a digital mortgage process can save organizations money over time. “We all know technology is expensive, and that's why it's important to partner with the right technology vendors,” continues Escobar. “Technology needs to bring process simplification and increase efficiencies and cost savings.”
Extra convenience
Today, buyers are all about convenience, from initial house hunting to closing. With digital purchase agreements and mortgage applications, buyers can fill out the necessary paperwork on either a computer or a mobile device and on their own time. During the underwriting of the loan, customers can upload documents to secure portals, and some companies, like Lennar Mortgage and Inspire Home Loans, offer a full digital close process, which allows customers to close remotely from the comfort of their home.
Increased application volume
Demand is up and interest rates are low, resulting in an increased amount of mortgage applications. With the increased efficiencies of a digital process, loan officers can accommodate an increased number of applications. At Lennar, Escobar is seeing about 95% of applicants coming through the digital portal. Plus, in August, 32% of eligible conventional loans were remote online notarization closings, where documents are electronically signed online in the presence of a notary.
Customer service refocus
From the perspective of a loan officer, the digital process frees up time to focus on customer service and loan quality. Kendrick states, “You still need the human touch. The vast majority of people appreciate the convenience of a digital experience, but the service of a human and being able to focus on that versus some of the more administrative mundane tasks streamlines the process and significantly improves the overall experience.”
More informed buyers
Because buyers are able to self-serve in a digital process, they can browse for answers as they come up or they also have the option to contact their loan officer through digital systems or preferred communication channels, such as text. In Lennar’s digital process, Escobar also states, “Short little snippet videos are sent to them, informing them of their status and telling them what's happening next and what they're expected to do next.”
It’s just the beginning
While the mortgage industry was making strides pre-COVID and after the pandemic hit, there’s more to come. “Unquestionably there's going to be more innovation in the space,” says Kendrick. “The traditional mortgage process is very linear,” adds Escobar. “Our focus going into 2022 is to break down that process into multiple bite-sized pieces and allow for more efficiency, more volume, and better pipeline management. This is the future of mortgage.”
