There’s actually a divide forming in the mortgage industry right now between lenders that understand and meet the unique needs of today’s borrowers and those that are stuck in the past.
And news flash, an entirely digital mortgage process is not the answer. Some might argue the way our parent’s bought a home 30 years ago was actually easier than the over-digitized lending experience of today.
The key is to find balance. Most borrowers want and expect to talk with their lender at certain stages of the home buying process, but they also expect to be able to easily look up the status of their application online or submit documents via a portal. Which means lenders need to find a way to build a trusting relationship with the borrower, while still making the process fast and easy.
Shifting Borrower Expectations
To better understand today’s borrower expectations we recently conducted a survey of 500 consumers who received a purchase mortgage or refinanced a mortgage over the past 10 years.
According to the survey, “The Digital Mortgage Experience: A Study of Shifting Borrower Expectations,” more than a third of all borrowers prefer self-service websites, especially during the research stage of getting a mortgage. As they progress through the application and processing stages, however, borrowers prefer an increasing amount of help from mortgage professionals through a variety of communication channels, including online chat, telephone, text messaging, and email.
The most interesting discovery was not how borrower behaviors have evolved, but where they are headed. The trend line in our data shows that all borrowers, regardless of age, have a strong preference for more online and digital interaction with their lender. To succeed in this environment, lenders have to put the borrower at the center, which means an easy interface that offers transparency into the entire loan lifecycle, but with humans behind it.”
Among other findings of the survey:
– Overall, borrowers who got a mortgage over the past two years were 3.7 times more likely to find their lender through online research or through social media than they were 5 to 10 years ago.
– Millennials were 45 percent more likely to find their lender online than baby boomers, who were 87 percent more likely than millennials to use their current bank or lender.
– Refinancing borrowers were more likely than purchasing borrowers to use an online lender, but recently the gap is closing. Over the past year, 47 percent of refinancing borrowers used an online lender, compared to 38 percent of purchase borrowers.
– Borrowers who got a mortgage in the last year were 42 percent less likely to find their lender based on a Realtor referral compared to borrowers 2 to 5 years ago. Over the past year, in fact, only 10 percent of borrowers chose their lender based on a Realtor referral.
– Seventy-one percent of all borrowers were provided an online portal in the past two years. Those that were provided an online portal were twice as likely to say technology improved the loan process as those who were not provided this option.
Evolving Role of the Loan Officer to Serve Today’s Borrower
The role the loan officer plays in this new digital world is changing quickly. Homebuyers, especially first-time homebuyers demand a greater degree of information and hand-holding during the loan process.
With technology from Velocify and our many partners like Ellie Mae, loan officer can deliver a positive customer experience with:
– Fast follow-up at the first sign the consumer is interested in a loan
– Personalized loan scenarios provided with just a few clicks
– Loan status updates via the borrowers preferred channel
– An online portal to submit documents and easily check loan status
– E-signature options
– And much more.
All of these capabilities exist today and will only get better as we continue to extend what is possible. As a lender, arming your loan officers with the right technology to anticipate borrower needs and improve their salesmanship is critical Those lenders that adjust their business to better serve today’s borrowers will succeed.
For more insights on shifting borrower expectations, download our company’s latest study The Digital Mortgage Experience: A Study of Shifting Borrower Expectations.