It’s well established that a majority of consumers now start the mortgage process online.
As such, mortgage lenders are increasingly deploying online portals that deliver a fully-automated, all-digital mortgage process that is both intuitive and fast.
Now, with automated underwriting and automated asset verification services, lenders can deliver a convenient, paperless process that is designed to leave borrowers fully satisfied.
But if consumers are increasingly turning to the Web to select their mortgage lender – and all mortgage lenders are delivering a fast, digital mortgage process – then how will consumers choose their mortgage lender in the future? What will differentiate mortgage lenders from each other, in terms of the customer experience?
Sure, many consumers will continue to start the process with their own bank. And some will continue to want to meet with a mortgage broker or loan officer in person as a first step.
But increasingly, consumers will use Google Search to find a lender – and those lenders which appear on the first page of the search results will likely have an advantage in capturing those borrowers.
That’s not to say that borrowers won’t still shop around – they will – it’s just that those lenders which appear at the top of the search rank will have the benefit of getting “first crack” at these borrowers.
Interestingly, providing live support via the borrowers’ channel(s) of choice is now also a key differentiator among lenders that are offering a fully digital process. That is to say, borrowers still desire the option to “zero out” of the automated process and have a live person pick up where the automation left off.
A recent survey conducted by Ellie Mae reveals that most borrowers today expect lenders to deliver a fully digital mortgage process. In the survey, 50% of borrowers said they chose their lender based on whether they offered an online application or portal, and 47% said access to an online portal for uploading documents was a factor in their decision.
Likewise, a majority of borrowers who were not offered online or electronic options from their lenders would have preferred those options.
About 54% percent would have preferred an e-closing portal, while 44% would have preferred to use an online application, according to the survey.
Among all borrowers, the top three reasons provided for liking the online application process included faster time to close (66%), a simpler application process (61%), and information more readily available (54%).
Still, the firm’s Borrower Insights Survey reveals that borrowers are demanding more communication throughout the loan origination process.
Ellie Mae’s data shows that communication across multiple channels between lenders and borrowers has increased by approximately 20% for those who took out loans within the last year compared with borrowers who obtained their loan in the last three to five years.
Direct communication with a lender can be especially important to younger borrowers and those who are applying for a mortgage for the first time, as they can have their questions answered and feel reassured that the loan process is on track in real-time, the company says.
The survey shows that when borrowers fill out online applications, it is common for them to abandon the process or take multiple sessions to complete it. Only about one half that have used an online mortgage application finished in one sitting.
And about one quarter of those that have used an online mortgage application started the application online but did not finish it online.
“As more Millennials enter the housing market, it will be imperative for lenders to prioritize the use of all available technologies, digital tools and communication channels to foster strong borrower relationships throughout each step of the loan lifecycle – from the moment they are interested, all the way through to closing,” says Joe Tyrrell, executive vice president of technology and corporate strategy for Ellie Mae, in a statement. “With borrowers using an average of more than five different methods of communication throughout the origination process, it is up to the lenders to offer a customized approach for each individual borrower to best suit their unique needs. That means employing every channel and being able to pivot from one to another as the borrower needs shift.”