How to Calculate the ROI of Mortgage Software

How to Calculate the ROI of Mortgage Software

With interest rates recently hitting a 50-year low, mortgage applications increased so much that the MBA doubled their projection for refinance originations.

The volume of applications has staggered the mortgage industry. Some lenders are increasing their rates as a counterbalance to the avalanche in demand.

We’ve been hearing from loan originators every day that are buried by refinance business.

Where typically their focus is on generating new business and making connections with referral partners, now all hands are being called on to help manage loan files and get as many deals closed as possible while the environment is conducive.

Time is the mortgage originator’s most precious resource right now.

Originators who find themselves without the capacity to handle the loan application volume will see their hard-earned customers look elsewhere to get the deal done.

To process more files, faster, and close as many loans as possible – all while maintaining a high standard of customer service excellence amid unprecedented circumstances – originators are leaning on their digital technologies to help carry the load.

Here are three areas they are able to get significant uplift from one of those technologies, the point-of-sale, so that they can maximize their share of the refi boom business.


Web-based point-of-sale systems with workflow automation allow many files to be worked on concurrently and eliminate the type of necessary-yet-redundant tasks that LOs or their teams get bogged down with.

By streamlining or even completely automating those portions of the loan origination process, more work can be done by fewer people and in less time.

Taking Applications

Taking an application over the phone or in-person is not the best use of everyone’s time, particularly during business hours when the originator has other high-priority duties.

But just leaving borrowers to fend for themselves with a paper 1003, or even a web-based version that looks just like the paper version, can be a bad idea as well.

By utilizing modern point-of-sale technology that employs the interview-style method of guiding borrowers through their application one step at a time, originators can get highly accurate and complete submissions without requiring the time or effort to do the guiding themselves.

Borrowers want to get their application in as fast as possible right now to take advantage of the favorable rates, but they also want to do it from the comfort of their home or mobile device and with as little pain as possible.

Gathering Documents

There are many different channels through which to collect documentation from borrowers. The problem is that the vast majority of those channels are either incredibly inefficient, not secure, or both.

The mortgage point-of-sale absolutely shines in this department.

It provides a secure and transparent portal for borrowers to see exactly what documentation is being required of them and gives them a simple way to upload their response, or use an integrated verification solution to directly authorize the gathering of information from the source.

These processes can be done completely online, from anywhere, on a mobile device if necessary, and keep the loan file organized and accessible at a glance.

Automating Communications

LOs are super busy. Most borrowers know that.

But they still have an expectation for the service they will receive and the level of communication that will take place around their loan as the process unfolds.

For originators and their teams, manually updating clients when their loan status changes is a time drain even when application volume isn’t up over 50%.

This is where leaning into customized automation can relieve a huge amount of pressure from loan teams and still give borrowers the timely information that they want.

Loan milestone status updated? The system will let the borrowers know.

Application not complete? The system will remind them to finish it.

Documents outstanding? The system will tell them exactly what is still required.


There is an unprecedented need for staff, as well as prospects and borrowers, to avoid the office right now and anything companies can do to allow people to be productive and contribute while keeping their distance is a huge benefit for everyone.

Web-based technologies like video conferencing, messaging, screen sharing, and cloud storage provide part of the foundation that a mortgage business can take advantage of to make this happen.

As are other origination systems like many LOS solutions, CRMs, and point-of-sale systems.

Not only do borrowers get the benefit of being able to fulfill their loan requirements digitally, including eSigning disclosures and authorizations, but the origination team can use the same systems to manage their files, doublecheck for accuracy, and get the loans registered.

With the right systems in place, loan operations at the branch level can be run fully-remote for a period of time without experiencing a drop in performance or efficiency.


When time is of the essence, nothing is more frustrating than having to hit the pause button because a piece of data needs to be retrieved from a separate system or location.

The ideal workflow puts all the necessary information to complete a process at the fingertips of the lending team exactly when they need it.

There are several ways that the point-of-sale system works to accomplish this goal:

  • It allows all relevant documentation for the loan file to live in one centralized repository.
  • It directly integrates with other systems in the origination software ecosystem to synchronize data – improving data hygiene and access.
  • It can gather direct-source information from banks, employers, and the IRS through integration with industry-approved verification solutions.
  • In can, in the case of Floify’s point-of-sale system, be configured with custom data fields that put necessary loan and borrower data directly on the screen.


We recently commissioned a survey of 100 loan originators who utilize the Floify platform and asked them to quantify the results that they’ve experienced since implementing point-of-sale technology into their lending operation.

What we found was that LOs were closing loans faster (up to 10 days in some cases), boosting their production by 20-50%, and reducing their workload through increased process efficiency.

All of those key results are directly applicable to the current mortgage environment.

Read up on the results from the survey in our whitepaper covering the ROI of mortgage point-of-sale systems.

When LOs spend time and money implementing changes to their workflow, they expect an improvement in one area or another. Being able to calculate the positive or negative return you are getting on your mortgage software investment is critical to understanding which systems are actually helping your business, and which are not.

Benchmarking performance indicators

One key to calculating the ROI of your mortgage software is to take measure-of-performance indicators prior to implementing any changes to your workflow. Establishing benchmarks allows for an apples-to-apples comparison of before and after performance. Example benchmarks include loans closed per year, days to close, staff hours per loan file, or loans produced per team member. This also can include any other significant metric you feel best demonstrates the change you desire. For example, do you want to close more loans or work fewer hours?

There are a couple of fundamental guidelines for calculating the ROI of your mortgage software. The first is that you can never have a large enough dataset. The more data you have over a longer period of time, the more accurate your benchmarks. The second is to only make one process change at a time. This makes it possible to attribute any variation in your performance metrics to the specific change that was made.

Calculating Mortgage Software ROI

In order to calculate return, you will need to convert your benchmarks into the same unit used to measure the cost of the software (e.g. dollars). If the benchmark you’re using to calculate ROI is related to hours saved, you’ll need to determine what the dollar value of an hour is. Similarly, if you want to calculate your return based on the number of loans you’re closing, each loan unit should be assigned a value equal to your average per-loan volume.

The actual equation to calculate ROI is quite simple. If you’ve worked your way through establishing benchmarks, you’ve already done the hard work! First, determine the value gained or lost by comparing the data points of your benchmarks. For example:

Data point after change (#loans/month x avg $ net loan unit revenue) – Data point before change (#loans/month x avg $ net loan unit revenue) = $ Net Loan Revenue Gain/Loss

Continue to get more precise by repeating that comparison across additional “non-competitive” metrics. If you’re producing more loans AND working less overall hours at the same time, those are both gains/losses that can be combined to determine your overall change.

Next, determine the cost associated with the mortgage software implementation. If you are examining your gains and losses as a monthly comparison (versus annual), make sure the cost you are calculating is in the same terms. Many times this will simply be your monthly subscription cost, but can also include setup fees, training fees, and various other associated costs.

Use the following formula to input your data and determine your percent return on your investment over the time interval. Make sure to be careful to ensure all data points are in relative terms.

($Gain – $Cost) / $Cost

This ROI calculation is extremely useful in understanding the effectiveness of changes to your workflow, even beyond the application to mortgage software. Follow the same principles discussed here in order to measure the return on investment from any single change you make to your process.