Everyone involved in the purchase of a home knows that seeing a mortgage loan through to the finish line feels more like a marathon than a sprint. The sheer number of individuals and institutions that participate in the process makes it very complicated and time-consuming, but with today’s technology, it doesn’t have to be that way. Here are 6 steps lenders can take to simplify and speed up the mortgage approval process.
1. Adopt an electronic workflow
Buyers, real estate agents, lenders, underwriters, appraisers, home inspectors and closing representatives. At every step of the mortgage approval process, important information is being shared between these groups of people via phone, fax, e-mail and overnight services. In each of these instances, information is at risk of being lost or miscommunicated, leaving room for error and lengthening each step. When lenders adopt a digital workflow, data can be easily accessed, corrected and passed along without interruption or delay.
2. Set up a collaborative online environment
Lenders can leverage specialized online applications that allow mortgage documents, notations and any related informational assets to live and be shared in a digital environment. No more digging through stacks of files or scheduling appointments off-site. Using collaborative digital processes helps lenders finalize loans faster without the delays involved in matching up multiple schedules or following a paper trail of mistakes.
3. Improve visibility into the lending process
Both internal and external stakeholders want insight into how the process is moving along to better synchronize schedules, inform decisions and ensure the best outcome. Visibility into the lending process is easily improved by moving workflows online, which allows mistakes to be recognized, reported and resolved in a matter of hours or minutes.
4. Incorporate electronic signatures
Though the E-SIGN Act made valid the use of electronic signatures, contracts and records under certain criteria in the year 2000, e-signatures in lending have only recently begun to gain industry-wide acceptance. E-signatures reduce paper and mailing costs associated with handwritten signatures. And because e-signatures allow documents to be signed from any desktop or mobile platform anywhere in the world, the technology is giving lenders a distinct time-to-close advantage over less-savvy competitors.
5. Customize experiences
Loans vary, as do people’s personalities and buying experiences. Data analytics software is allowing lenders to not only select the best loan for each individual quickly, it's also identifying which customers require more information vs. those who need no hand-holding at all. Enabling such an experience provides education to better inform and speed customer decisions and eliminates unnecessary face-time and direction for more seasoned investors.
6. Better facilitate compliance
By automating all lending-related documents and processes, a lender’s ability to respond quickly to risk and to implement future compliance guidelines is greatly improved.
Though a mortgage loan may never be simple, lenders that increasingly leverage new technologies and lending-specific solutions can make the road smoother and the runners more equipped to finish the race in much better time.