It’s 2005, and Linda is all set to purchase her first home, her “starter home.” She knows finding that perfect home won’t be easy. On top of that she knows closing on her mortgage is going to be a time-consuming process. She is exasperated and dreading the thought of going through many cumbersome manual processes and tiresome paperwork. There is nothing much she can do but patiently wait for the process to play itself out.
Fast forward. It’s 2021. The pandemic has reshaped how we work, and the world is adapting to a new era of remote working.
Amid the upheaval, like many others, Linda decides to move from her ‘starter’ home to her ‘forever’ home with a backyard and home office. She found the perfect home by searching Real Estate sites on her mobile phone, yes, she found her home on her iPhone. Next step is the dreadful mortgage, but thanks to her lender’s digitalized application and closing processes, the entire home-buying process is now simplified and much quicker; Linda is pleasingly astounded by how much mortgage lending has evolved over the years.
Reaching the New Wave of Borrowers With Digital Mortgage Capabilities
Today’s mortgage industry is on the cusp of digital re-imagination. Driven partly by the need to meet the growing demand from tech-savvy borrowers for a quick and seamless process and partially by the pressure to cut costs and enhance efficiencies. Lenders are looking to digitize their end-to-end mortgage process. That’s the dream state for a lender. Thus far, most of them have focused on the lending process’s front end, enabling digital loan applications and consumer portals. As competition intensifies, they shift to the next stage of digital transformation by turning to Fintech lending solutions that boost efficiencies in loan production and enhance the servicing experience.
Fintech Lending- The Digital Focus of New-age Lenders
According to the report titled ‘The Role of Technology in Mortgage Lending,’ fintech lenders have the ability to process loan applications about 20 percent faster than other lenders. Fintech lenders process mortgages faster than traditional lenders, measured by total days from submitting a mortgage application until the closing, the report indicated.
However, switching traditional mindsets and operating models to deliver digital journeys at an accelerated pace is no easy feat for a financial behemoth. But modernizing the borrower experience is the need of the moment for all lenders.
Fintech is playing an increasing role in shaping financial landscapes. A fintech mortgage provides faster, more accurate, safer, and more affordable options than traditional mortgage lenders. It enables lenders to create a better relationship with borrowers with quicker and more seamless, personalized experiences. It accelerates data gathering, helps borrowers with superior communication, and reduces avoidable steps along the way.
Seizing the Benefits of Fintech Mortgage Lending
- Enhanced efficiency: Efficiencies produced by fintech lending solutions allow lenders to close on mortgage loans faster. Automating numerous back-office operations and centralized data solutions also enable lenders to leverage customer information more efficiently than ever before. It speeds up otherwise time-consuming operations and further helps in closing the loan process faster.
- Delightful customer experiences: A more agile, streamlined application process indicates customers may be more likely to perform a given task that serves the lender in terms of the number of applications closed and funded.
- No more fragmentation: Fintech mortgages replace the fragmented siloed solutions of traditional lending with an integrated, end-to-end digital solution. It leads to greater efficiency and productivity, along with quicker loan cycle times and faster closures.
To the Future:
Let’s fast-forward to 2030.
Linda is in the process of refinancing her ‘forever’ home. She’s astonished by the impressive advancements in cycle times and service levels compared to her 2021 experience. Her lender leverages next-gen digital interfaces that allow her to have contextual chats in real-time. Her appraisal is done same day, by a drone. Her lender uses AI-based applications to drive intelligent decisions based to ensure that Linda meets specific credit requirements, saving her significant time and effort.
Not just that, the blockchain technology is there to provide a single source of verified data such as her tax information, income, assets, property valuations, and so on, improving accuracy as well as fast-tracking the loan fulfillment process.
The outcome: Linda e-closes her refinance in a couple of days, or perhaps even in a few hours, thanks to an integrated digital ecosystem. It truly is a “one-click” refinance.
Are you ready for the digital future?
As digitally connected millennials and Gen Z borrowers coming into the marketplace expect hyper-personalization and faster closings. Lenders seeking future-proof success have only one choice – move from a tactical to a strategic mindset, modernize processes, and embrace intelligent automation.
Learn how Tavant can help you lay the foundation for an end-to-end digital mortgage; reach out to us at [email protected] or visit us here.
