In April 2018, the Bank of America launched the Digital Mortgage Experience. It is a digitised mortgage service that allows customers to fill their mortgage applications online through a mobile app or the bank’s website.
The move by the Bank of America was not the first. It joined other leading mortgage lenders such as Social Finance, Lenda, and Quicken Loans among others. It is evident that this trend is bound to continue because it offers a competitive edge that is necessary for survival in the current mortgage industry. Here are some of these benefits.
Reduced Mortgage Processing Time
In the past, it took at least two weeks to process a mortgage application, thanks to manual handling of the paperwork. Again, there are about 300 spaces for the customer to fill. Consequently, mistakes while filing the forms were common. All these increased the throughput time and customer frustrations.
With digital mortgages, the system automatically fills most of the customer’s details and picks out any errors. It results in improved efficiency and significantly reduces close times and overheads.
Provides Consumers Control over the Mortgage Process
Today’s consumer needs to be part of the operation. As a result, they will opt for mortgage lenders or brokers that have a consumer-based process. It is for this reason that self-serve origination loans are in high demand. Firms such as Quicken Loans saw their lending skyrocket when it reduced Rocket Mortgage.
Any other technology that seamlessly incorporates consumer’s control into the procedure is welcome. They include e-notes, electronic verifications, and blockchains, among others.
It Satisfies the Efficiency Expectation of Millennials
Mortgage consumer demographic has changed with millennials forming a significant percentage. A class of homebuyers values the use of technology, efficiency, and speed. They are therefore attracted to fast and easy to use consumer mortgages platforms.
A Digital mortgage meets the needs of this booming class of buyers effectively. Lenders are now focusing more on technologies that present solutions based on the consumer’s need for transparency, and predictability.
Lending Officers Have Become Active Consultants
Unlike most technologies, the digital mortgage does not eliminate the need for a human workforce. Instead, it enhances the responsibility of lending officers. Initially, the officer’s job was to get information from the applicant then spend hours punching it into the system.
The digitisation of the process allows the lending officers to let go of the busy work and focus on helping customers with decision-making. Their role has shifted from data entry to active mortgage consultants.
Computers Help in Making Smarter Decisions
The advancement of technology in artificial intelligence and machine learning has made computers a reliable resource when making lending decisions. Automation of the mortgage process eliminates human biases leading to smarter choices and faster implementation.
Smart Document Capture
It is the key to all the benefits of digital mortgages. Smart document capture solutions use automated supervised artificial intelligence technology to classify and process document. It not only reduces the overall throughput time but also improves accuracy and productivity.
Having a competitive edge in the mortgage industry today requires investment in improving customer interaction and the efficiency of mortgage processing. Digital mortgages provide this vantage point to lenders and brokers.