Mortgage providers have been gaining ground when it comes to true digital disruption of the notoriously clunky, paper-heavy process. Although there’s still plenty of work to do, the industry has made some important strides toward streamlining the process.

From fast food to clothing, dating to vacation rentals — it’s a digital marketplace and has been for some time. While no one expects to purchase a home with one “buy-it-now” click, it’s not surprising modern home-buyers expect a faster, more frictionless, completely digital end-to-end mortgage process

Mortgage providers have been gaining ground when it comes to true digital disruption of the notoriously clunky, paper-heavy process. But while there’s still plenty of work to do, the industry has made some important strides toward streamlining the process, which will have a lasting impact on Realtors, borrowers and the industry as a whole. 

The best innovations so far

Some of the biggest disruptions to the traditional mortgage process have occurred on the front end, as lenders implemented robust point-of-sale (POS) systems. An effective POS allows lenders to make life more convenient for borrowers — like cutting the time it takes to submit a loan application or receiving a pre-approval letter — while reducing their own operating costs and increasing data security. 

What’s more, the best POS systems not only let borrowers get deep into the fulfillment process on their own, they also allow them to access the application across multiple channels. 

Automating data verification

Lenders know that gathering borrower data digitally is only the beginning. One of the real wins for efficiency and accuracy comes from automated data verification. 

Lenders that can quickly verify things like asset and employment information can make the loan process significantly easier on their customers. If borrowers can link their bank accounts directly into the application, for example, the lender can verify the information instantly. That saves borrowers from having to type the info and upload pages of bank account printouts for verification. 

Tech solutions for the future

Without question, the technology that lenders are most eager to incorporate into their mortgage processes is artificial intelligence (AI), including machine learning and predictive modeling. From imaging and indexing documents to identifying anomalies and assessing risk, AI is a game-changer when it comes to increasing speed and efficiency at all stages of the mortgage process. 

Predictive modeling is another technology poised to disrupt the norm, particularly when it comes to better understanding the borrower community. In the same way Amazon “knows” a customer is looking for red boots, for example, lenders can customize loan offerings and provide targeted resources. They can also use analytics to get customers off to a better start out of the gate — think pre-qualifying, pre-approving, and pre-populating loan applications — to make the whole process more seamless. 

Why human interaction isn’t going away

Digital solutions have already replaced some of the human interaction that used to be a routine part of getting a mortgage. But it’s clear the human touch will always have its place along the way.

The need for live interaction, of course, varies by borrower. Some people want someone to guide them through the whole process. Others are adamantly self-serve. The key for mortgage providers is to ensure every type of customer can receive the right level of human interaction that benefits them the most, while maintaining speed and accuracy. 

What sets the best lenders apart?

Lenders that marry brand and relationship with speed and value are bound to provide the best product with the best process. That means creating an infrastructure that combines a top-shelf digital platform with real mortgage professionals who can deliver.

Another thing that separates a lender from the pack is the ability to cater to different types of borrowers. First-time homebuyers, for example, likely have different needs than more experienced homebuyers. Lenders who want to operate in large market segments will have to find ways to meet various buyer needs. 

Finally, lenders who spend time providing financial education content already have an edge in the modern marketplace. That’s because borrowers are coming to the table better-informed than ever before. In fact, younger buyers often start their homebuying research one to two years before they begin the process of getting a mortgage. 

What these shifts mean for the Realtor community

With the digital disruption taking place on the mortgage front, it’s only natural that the real estate community will experience its own disruption in the coming three to five years. The good news is, realtors who are prepared for these changes and ready to embrace technology will continue to survive and thrive. 

Some homebuyers will naturally become less reliant on the realtor community as technology begins to replace various pieces of the traditional homebuying experience.  

But there will always be a segment of consumers who prefer to work hand in hand with realtors. This offers the realtor community opportunities to leverage technology to provide borrowers with a better experience. For instance, realtors who have the capability to allow borrowers to complete information (like the purchase contract) as part of a digital mortgage system can significantly speed up the overall process. 

Both lenders and realtors are still in the early stages of cracking the code for how to best create a frictionless experience for buyers. The way forward is a mix of technology and the human touch, with a common goal of providing speed and simplicity to borrowers and a more efficient experience all the way around. 

Brian Rubenstein is Senior Director with Ally Home, the consumer lending arm of Ally Bank. 

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