Technology and the digital age has certainly made an impact on the Boston area mortgage business. While roughly 90% of prospective homeowners search online for a home, less than 10% of mortgage lenders offer a comprehensive digital mortgage experience. Now, mortgage lenders are starting to enter the 21st Century by gradually reinventing the mortgage process. Here are some ways in which important improvements are occurring.
Boston Area Mortgage Business – Ushering in Technology
Some mortgage lenders still subject their prospective borrowers to the golden age of copiers, scanners and faxes to assemble and deliver loan application information and financial paperwork. And while the Boston area mortgage business has largely been overlooked when it comes to technological advances, it does appear that is changing. Here are the top five ways technology is changing the home mortgage lending process for lending institutions and borrowers.
A better borrower experience.The mortgage lending process from application to closing is, by its very nature, information driven. Some loan files can exceed 500 pages. In an effort to save time, much of the information required by lenders in the Boston area mortgage business is available digitally, and applicants can provided bank account information, tax forms and pay stubs online. This not only streamlines the application process for homebuyers, but it also makes the collection and verification steps easier for the lending institution. Since the financial data is independently verified from its source, mortgage lenders are able to more readily confirm that the information is accurate and current, thus saving time in their review and analysis.
In addition, some financial technology companies are offering mobile experiences for prospective borrowers. The mobile apps give the borrowers unique access to the mortgage lending process. The accessibility enables borrowers to stay on top of their documentation needs and requirements, ultimately giving them a better, more satisfying user experience.
Increased transparency. Since applicants don’t have access to their mortgage lenders’ internal systems, they rarely know where they stand during the loan application process. They are then forced to rely on the loan officers to communicate various requirements or updates via phone or email. Some innovative Boston area mortgage lenders are now providing information portals for prospective borrowers to be able to see the same information the loan officers do. This improvement in transparency allows borrowers to obtain a complete list of required documentation ahead of time – and to know where they stand with respect to any additional information required. This innovation enables both parties to work together for the common goal of assembling the information in order to get the loan approved and closed in a timely manner.
Making the mortgage process painless. A normal turnaround time for a borrower to receive an underwritten loan approval from a mortgage lender is about 18 days. Overall, it could take roughly 50 days to complete the loan process. Comparatively speaking, in a totally digital world where online shoppers can order an item and get it overnight, 50 days seems like forever.
Technology is helping introduce the mortgage lending process to the modern world. Using a workable combination of intuitive design and direct connectivity, loan applicants are now able to contribute to the process and receive up-to-date assistance from the lending institutions. This makes the borrowers more in control of their own destiny, as well as participating in more of a “team approach” to getting their loan approved.
Digital compliance. Following the housing crash of less than a decade ago, federal regulations required lenders to follow certain lending practices and give their borrowers more disclosure information early in the mortgage loan process. The regulations are designed to allow mortgage lenders to adhere to strict guidelines while limiting negative impact on the borrower experience.
New developments in technology have enabled lenders to automatically send the production and delivery of electronic disclosure information at certain points in time during the mortgage application process. In addition, the natural creation of a digital “paper trail” for audibility and accountability is an offshoot of the new technology.
Money-saving advantages. It’s estimated that it costs around $8,000 for a lender to complete a mortgage from start to finish. Much of that cost is for employees to perform routine, manual tasks such as translating required documentation into email form, as well as the physical tracking of various items on paper documents and forms. In turn, such work inefficiencies are passed through to the borrowers by way of higher fees and other processing or closing costs. Using modern technology can automate manual work and reduce these costs. In addition, lenders are able to increase their efficiency and productivity – passing the cost savings on to their customers.
The advent of workable technological advances in the Boston area mortgage business creates faster and more simplified lending interactions. Best of all, the digital “revolution” will likely continue to impact the mortgage industry and improve the borrower experience. While mortgage lending will probably never be a “one-click” process, it can continue to be better, faster and less costly. When you stop and think about it, the digital world has basically spoiled us all. We want – and often expect – goods and services almost immediately. From the digital delivery to a movie or television program on demand, to the ease of online banking, our society has come to expect speed and convenience. It’s only natural that we’d expect the same speed and delivery of improvements in the Boston area mortgage business. In addition, mortgage lenders want it, too. That’s why we will continue to anticipate and expect further advances that will make the home buying and home financing process a better experience for all parties involved.
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