Is Your Online Mortgage Application Costing You Business?
ICE Mortgage Technology's most recent Borrower and Lender Insights Survey, the 2020 report, made clear that today's homebuyers are using technology more than ever – and also want more digitalization of the mortgage borrowing experience. This attitude is reflected heavily in the survey's data.
For example, 64% of all consumers surveyed reported having increased their usage of online housing and residence solutions. At the same time, 63% of those consumers also answered that they believe an online mortgage process would make it easier to buy a home than an in-person process.
The mortgage application is notorious for causing borrower (and loan originator) frustrations. The standard form 1003 can feel overwhelming in its entirety yet can be simplified and streamlined through intelligent digital solutions. It's something similar to going from paper-based tax preparation to a modern digital service that only asks for the information that is necessary based upon the consumer's profile.
And consumers know this, as evidenced by the 58% of those surveyed that stated that the availability of an online loan application would likely impact their choice of lender.
These trends, and others in the survey, show not just the importance of having an online mortgage application, but also having the right online mortgage application. It's not enough to slap the entire form on a website and expect to receive high quality, accurate submissions.
And in today's heavy purchase market it is more important than ever for loan originators to get this piece of their digital mortgage experience right.
What Issues Do Borrowers Have with the Online Mortgage Application Process?
The ICE Mortgage Technology survey unveiled a number of common frustrations that borrowers have with the online mortgage application. Fortunately, with foresight and the right tools, these are issues that can be easily remedied. The top four reasons that borrowers abandoned an online loan application were:
- The application took too long (30%)
- The borrower needed assistance (29%)
- The borrower was missing required information (29%)
- The borrower was distracted (28%)
These responses paint a poor picture of the mortgage application process that many borrowers face when attempting to apply for a loan online.
Unfortunately, some lenders that offer an online mortgage application still utilize older technology. This older technology is very inflexible and typically results in an online application that is nothing more than the full form 1003 embedded on a webpage. For most borrowers, there are many data inputs on the 1003 that won’t apply to their situation. Forcing a prospect to review the full form in it's entirety – and not just the relevant portions – is a recipe for a frustrated, confused, or distracted borrower
With how digitally savvy mortgage borrowers have become, these antiquated systems are doing more to ward off prospects rather than connecting them with a loan originator.
How a Customizable Online Mortgage Application Provides a Solution
A fully customizable online mortgage application solves many of the issues that cause borrower frustration by providing the flexibility and automation that loan originators need to craft the ideal experience for their prospects.
The application is too long? A fully customizable application allows LOs to create a shorter form by removing data inputs that could be instead gathered after making a connection with the prospect.
The borrower needed assistance? Dynamic online mortgage applications employ the latest technologies to allow LOs to more easily guide their prospects. For example, Floify's Co-Pilot functionality lets LOs work with their borrowers to complete their application in a cooperative and simultaneous environment. Both LO and borrower can quite literally work together on the application at the same time.
The borrower didn't have required information? A flexible mortgage application empowers LOs to reduce the number of data inputs that are required for submission. This prevents borrowers from getting stuck in more complex areas of the form so that they can still submit the form, get into the pipeline, and have the LO follow up for completion.
The borrower got distracted? Modern online mortgage applications like Floify's utilize a guided, question-and-answer approach that promotes borrower engagement and keeps the borrower's momentum moving forward at all times.
The bottom line is that today's mortgage borrowers are overwhelmingly pushing for more digital solutions, even to the point of including the presence of these solutions in their decision making process when choosing lenders. But, it's not just as simple as an LO or lender sticking anything on their website. Borrowers have expectations for how the process should go, and when the online experience doesn't match up to those expectations, they abandon it and look elsewhere.
If your online mortgage application is lacking in flexibility and innovative functionality, or if you’re still searching for the perfect 1003 to compliment your website, see for yourself how Floify's modern platform can help create a digital experience borrowers will love.