Digital mortgages are currently taking the world by storm and are slowly but surely becoming the way to the future. The transition from conventional mortgages to digital mortgages was long due, and the COVID-19 pandemic only accelerated its implementation. Before the pandemic, millennials were already embracing the idea of digital mortgages. As the name suggests, digital mortgages are an automated and more straightforward way of making loan processing more convenient for people from all corners of the world. From lead generation to mortgage origination, uploading documents, and closing, digital mortgages enhance lender and customer experiences.
Digital mortgages often involve minimal human interactions and are an excellent option for people who are too busy or do not want to deal with frequent office visits and phone calls. Although customers and lenders are moving digital, it doesn’t mean they should throw away the human touch. Loan officers are still essential, considering that many customers are still ignorant about the new and advanced loan process. Such customers need a warm and friendly individual who can walk them through every loan process step. Typically, digital loans empower consumers, enabling them to customize their experience.
Benefits and challenges associated with digital mortgages
A digital mortgage provides the customer with a holistic experience from lead generation to processing to closing and post-close marketing and auditing. A digital mortgage is more than just owning an online application on the website; it involves automation of the entire process with minimal human interaction. Embracing digital mortgages can minimize loan
processing time by 40%, underwriting touches per application by 40%, and lower costs per loan by 10%. By implementing digital mortgage solutions, lending institutions have a high potential of making a 75% increase in their sales, a 50% decrease in the initial costs, and a 25% increase in the pull-through rate. Customer expectations keep evolving with time, and a digital mortgage can positively impact the customer’s experience. Digital mortgage focuses on rationalizing the original journey and providing an effortless buying experience to the clients. It does away with the long and tedious process of stack application forms, uses data intelligence to optimize the product solution, and facilitates transparency and conditional approval throughout the process.
Lack of cooperation between operations functions, IT, businesses and risk can interfere with the digitization efforts of lending companies. Because digital mortgage relies heavily on data analytics, lack of skills and limited data can pose several challenges. Acquiring a mortgage is one of the most important decisions people make, and they may not trust an automated system with such a decision. Lenders who are implementing digital mortgages also experience regulatory hurdles.
Challenges associated with digital mortgages
Traditional mortgages usually require a lot of time to process, and it can take over a month to finish processing, approve and close the loan. The time-consuming process can be disheartening for both lenders and borrowers. Lenders can spend that time acquiring new leads and closing more loans within shorter periods, so clients don’t have to spend time waiting for their loans. A digital mortgage allows you to complete the same process with fewer hurdles within a shorter timeframe.
Challenges associated with digital mortgages
Traditional mortgages usually require a lot of time to process, and it can take over a month to finish processing, approve and close the loan. The time-consuming process can be disheartening for both lenders and borrowers. Lenders can spend that time acquiring new leads and closing more loans within shorter periods, so clients don’t have to spend time waiting for their loans. A digital mortgage allows you to complete the same process with fewer hurdles within a shorter timeframe.
