Homebuyers will favor mortgage lenders that embrace technology
In case you haven't noticed, there's a lot of change happening in the mortgage industry.
More than 3,300 fintech companies have flooded the mortgage space since 2010 to solve industry pain points, and lending by these firms now makes up more than 36% of all personal loans — up from 1% in 2010.
Every aspect of the home buying process, from loan approval and origination to that dream home closing, is going digital. More than 70% of lenders are currently integrating or investigating next-generation technology services, and 65% of real estate professionals believe they will need support for remote online notarization, communication portals, or secure collaboration spaces before the end of 2019.
That's why the most technology-forward lenders and brokers will win in this new age of digital disruption.
Lenders that use technology to meet customer demands and build disruptive delivery models will see a dramatic spike in market share. These technology adopters will also save thousands of dollars in origination fees, according to Fannie Mae.
Homebuyers traditionally pick the lender with the best rate and the lowest mortgage payment, but in a competitive marketplace, customer experience is often the first tiebreaker. The way you delight customers will soon be table stakes, and the ability to fund more loans, sooner, will be the accelerator that helps your business separate from the pack.
And, now that millennials are of prime home-buying age, the largest, most tech-savvy generation is craving that faster, simpler, more convenient mortgage experience. Nearly two-thirds of borrowers said they would switch lenders if it meant a better customer experience.
Embracing technologies has a trickle-down effect that goes beyond your pull-through rate. The National Association of Realtors found that 95% of all homebuyers, and 99% of all millennials, used a website in their search for a home. But across every generation, prospective homebuyers consult real estate agents to help them negotiate their offer and final terms of sale.
Borrower satisfaction is heavily influenced by agents who invest in keeping customers informed, so real estate agents will have a greater responsibility to educate and guide homebuyers through an ever-changing industry. They'll seek out and recommend those tech-forward lenders, motivated by their clients' ability to close faster. After all, the only thing better than an all-cash offer is quicker financing.
How quickly could we finance a fully digital mortgage? People talk about one week like it's a myth. I believe we can complete a mortgage transaction in 48 hours, and Fannie's Day 1 Certainty program was a giant step towards that dream. It will take a village to get there, but I don’t think we’re that far off.
We're finally in a place that technology is connecting the real estate industry, integrating into the systems you use every day to deliver exceptional experiences to customers. What happens next is purely a business decision.
Technology is no longer a choice; it's purely a business decision. If someone tells you digital adoption is a marathon, it's because they're trying to sprint past you.