Mortgage Automation and Point-of-Sale Solution

4 Key Elements to Evaluate When Buying Mortgage Software

mortgage software purchase guide key elements

While just a few years ago most consumers would have said that the mortgage industry was lagging FAR behind on the technology front, the pace with which this dynamic has changed has been staggering. The industry has moved rapidly to adopt the process and organizational efficiencies afforded by implementing mortgage software systems that solve common challenges for both originators and their borrowers.

As the industry continues to progress on this front one thing has become abundantly clear: it is now “table stakes” to have some of these systems in place.

Borrowers are already flocking to lenders who make the process simpler and more efficient. Case in point: Quicken Loans’ $96 billion 2016 loan volume ($15B more than JP Morgan Chase and easily the most of all nonbanks).

The next generation of top talent in the industry will likewise want to work for lenders that provide them with technologies that enable them to do their job at a high level without needing to work 70 hours a week to do it.

But how do you know which systems will be the best choice for you?

What to look for when shopping for mortgage software systems

To get the right fit for you, your team, and your business, the evaluation process needs to include more than just the raw functionality of the mortgage software.

Adoption / Ease of Use

What good is a new, business-life-changing mortgage software if nobody ever uses it?

To avoid having your investment sit on the shelf, it needs to be as intuitive as it is powerful.

The users – whether that be yourself, your team, or your borrowers – need to feel that they can easily get work done in the system, else the typical human behavior is to default to the more comfortable way of doing things.

Now the question becomes: how do you know if a system is easy enough to use that it will get user buy-in and adoption?

There are two ways to determine the answer to this question.

(1) Does the software have a free trial? If it does, get in there and explore! Test out some of the most common scenarios you envision using the system for. Or, if you’re short on time, ask someone on your team that you trust to take a look and give honest feedback.

(2) Access your peers. There is a lot of information you can glean by reading reviews of a mortgage software system that are written by your peers, or by talking to anyone you know who is using, or has used, the system.

Availability of Training / Support

There are always hiccups when you’re integrating a new mortgage software system into your workflow. Sometimes it’s because of unfamiliarity with the system, and other times you just may need some technical support to get a tricky piece working just the way you want it.

Strong technology providers will cover both of these bases. After all, when users feel frustrated or fail to adopt the new system it’s a waste of time and money for both sides.

  • Does the vendor provide any form of training to you and/or your staff?
  • Do they have helpful documentation available?
  • Who would you talk to if something isn’t working, or you need assistance?
  • These are incredibly important questions to answer before making a final decision.

    Solvency of Provider

    In today’s technology environment, it is not uncommon to see companies built upon venture capital or angel investment. In fact, many new technology providers will fall into this category.

    Building a business in this manner has the benefit of, if successful, allowing the company to scale rapidly by paying for personnel and infrastructure on someone else’s dime.

    There are also drawbacks to this approach. First, the direction of the company is now somewhat beholden to their investors and/or board of directors. Their top priority is to help themselves (make money), not help customers.

    Second, if the company fails to build a paying customer base fast enough, the influx of investor money may stop, and the current revenue will need to be enough to sustain the company. Far too often this results in mass layoffs, and “restructuring” of the business in order to meet obligations.

    Do research on companies whom you may do business with. Are they investor funded? Have they had to raise money over-and-over again? The last thing any originator wants is to invest the time and money into a mortgage software system, push for it’s adoption, train your staff, integrate the system into your workflow… and then the company folds.

    (Shameless plug: Floify is privately owned and has been 100% customer-funded since day one — more than 4 years ago.)

    Expected ROI

    This is very likely the most obvious element of a mortgage software system to analyze, yet is also the most difficult.

    To quantitively assess the type of return you should expect when implementing a new system, you have to have a deep understanding of your current workflow and processes and how the inefficiencies your aiming to fix are effecting your bottom line.

    Maybe you’re spending too much time communicating loan status to your borrowers and referral partners. How many hours do you spend sending those emails? How many can you expect to spend with the new system?

    As your production increases, maybe your payroll is getting out of control. Can system ‘X’ automate enough tasks to increase production relative to employees?

    Depending on the context of the problem you’re solving, the variables will change.

    No matter your technology goals, it is important to make a thorough and informed decision about the vendor and their system. Spending a bit more time upfront answering these questions and evaluating all of the elements will prevent you from wasting your efforts to install a poor fit.

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