A Mortgage Lender’s Guide to Today’s Digital Mortgage Process

by Tomi Pironti

Digital trends have helped countless industries become more agile and efficient. As a mortgage lender, it’s important to learn how a digital mortgage process can benefit both you and your borrowers. This guide will introduce you to the world of digital lending so that you can discover how it can enhance your business.  

What Is a Digital Mortgage?

A digital mortgage relies on electronic processes to help clients buy a house. Technology allows lenders to interact with borrowers through every step of the mortgage process. As a result, the process is smoother and more efficient, with fewer errors. 

An entirely digital mortgage process would take place with no human interaction and zero paperwork. Instead, the best digital lending options would offer a hybrid approach. This means that borrowers can still rely on the convenience of electronic options, while also benefiting from personal touch points along the way.

What does this mean for lenders? Relationships will always be the cornerstone of any business. Digital lending can help you nurture those relationships. The right tools provide convenience and efficiency but can also help to support your customer service.  

The Benefits of a Digital Mortgage Process

According to Forbes magazine, 99% of lending institutions believe that technology improves the mortgage process. Three out of four lenders cite the simplicity that technology brings. Others note the faster process and minimal data entry. 

Digital lending offers benefits for both the borrower and mortgage lender. Here are just a few of the ways that technology enhances the mortgage process.  

1. Greater Convenience for Borrowers

Digital lending options allow borrowers to compare rates while they are still in their pajamas. This is especially important to first-time homebuyers. 

Real estate “rookies” feel more at ease when they can proceed through the process at their own pace. Digital platforms also allow borrowers to compare rates, loan terms, and other customizable options.   

2. Higher Application Volume

A convenient process allows lenders to submit applications at a faster rate. This means that lenders can expect higher customer volume by offering digital applications.

Thankfully, digital tools can also help you to manage this increased volume. The best tools can assist in creating a customer pipeline and help you to network with real estate partners.   

3. Digital Mortgages Provide Greater Equality

Unfortunately, the historic mortgage industry has not always been favorable to underrepresented populations. Homebuyers can experience discrimination based on race, sexual orientation, or a disability. A digital lending process can help to stem this problem. 

Digital applications give underserved populations greater access to mortgage options. The New York Times reports that lenders have noticed an increase in applications from minority groups once they implement digital options.

Digital tools also eliminate unconscious bias. The screening process relies on financial data and credit history alone. When bias is removed from the approval process, borrowers enjoy a more equitable lending solution.

4. Borrowers Save Money Using Digital Tools

Online mortgage tools make it easy for customers to shop around. In one Freddie Mac study, customers who compared rates between five different lenders saved an average of $3,000.

That’s good news for you as well as your customers. When borrowers find great mortgage rates with your company, it helps your reputation. It builds trust. It also means that borrowers may be more likely to recommend you to their friends down the line.

5. Streamlined Communication

In any relationship, communication is key. Digital mortgage solutions can become a valuable part of a broader customer relationship management (CRM) system. These systems allow you to track your clients through every phase of the lending process. You can even send automated messages to your clients. For example, if a borrower completes a vital phase of the process, they can quickly receive a confirmation email.

Going digital means your borrowers will have greater access to you. It also means that you never have to worry about missing a message or question. Stay in touch throughout the process with a customized CRM platform.

6. Built-In Marketing Tools

Customer communication is only the beginning. A CRM platform can also assist you with marketing efforts. This means that you can use the centralized dashboard to manage such things as:

  • Email marketing
  • Social media marketing
  • Content management
  • Video marketing

Some CRM providers even offer templates that you can use when creating content. You can also track the performance of your campaigns and see how they stack up against your competition.

How Does the Digital Mortgage Process Work?

The actual mechanics of a digital mortgage depend on the software provider you use. Still, most lending processes will be nearly identical to a traditional mortgage. The main difference is that the digital process takes place via an online system.

A digital lending process will allow you to perform your usual due diligence, such as:

  • Credit checks
  • Evaluating income statements
  • Performing a debt-to-income (DTI) assessment

But here’s where the digital system really shines. The built-in algorithm will determine the kind of mortgage a borrower qualifies for. It can also determine the rate that the borrower can expect. It can even let borrowers know early on if they fail to qualify for a loan.

Guide the Whole Process

Of course, eligibility is only the first hurdle in the mortgage process. As a mortgage lender, you can use your digital system to walk borrowers through every phase of the process. You can also use your system to network with other real estate professionals.

Virtually every part of the lending process can now be completed electronically. E-signature options allow you to complete important documents quickly. This eliminates delays caused by in-person visits or sending forms through the mail. The result? Greater speed, more convenience, and fewer errors!

Digital Lending and Mortgage Leads

Digital tools can help you nurture your mortgage leads. You can use your platform to generate new leads, or you can manually enter leads that you gain through other networking opportunities. You can follow up with these leads, working to convert them into satisfied homeowners.

Current Trends in Digital Lending

It’s no surprise that the 2020 pandemic only accelerated the digital mortgage revolution. But even with normal life resuming, these digital options are here to stay.

As a mortgage lender, it’s important to stay on top of current industry trends. Here are a few key developments in the world of digital lending.

1. Emphasis on Mobile Technology

Consumers are already accustomed to using their phones to manage their finances. One study by Bankrate revealed that 44% of banking customers used an app to manage their accounts.

To compete in the digital world, mortgage lenders will need to optimize their platform for the mobile world. This starts with responsive web design that looks good on every device. But it also demands that you use an intuitive, easy-to-use platform that customers can access with the swipe of a thumb.

2. Hybrid Communication with Mortgage Lender

On the one hand, mortgage customers still expect regular communication with their lender. But customers are also accustomed to automated emails and other kinds of rapid communication.

This means that a digital mortgage platform can enhance your client relationships. Send out automated emails when your clients complete an important step in their mortgage process.

In other words, you’ll need a hybrid approach. Give borrowers the convenience of automation but also offer them the personalized care they deserve.

3. Speed Is King

The “on-demand” world is thriving for a reason. Digital customers expect rapid turnaround. For mortgage customers, this means a faster application process and a streamlined closing process.

The easier you make the process, the better. Customers will remember you more favorably if you provide fast, efficient results. This also makes them more likely to recommend your services to their peers once they purchase their home. It can even encourage other industry professionals to recommend your services or to partner with you.

4. Personalization

In the same way that customers expect speed, they also expect personalized experiences. Your digital lending platform should help prospective borrowers to find products or services that match their needs.

This is also where video marketing can be helpful. Videos allow you to connect directly to your clients and illustrate how your services will meet their specific needs.

5. Specialization

Another way to stand out is by operating in a specialty area. For instance, you might consider such specialties as:

  • Mortgages for first-time homebuyers
  • Mortgages for low-income borrowers
  • Commercial real estate
  • Reverse mortgage programs

Having an area of specialty can help you connect directly to a distinct customer base. It can also help to set you apart from your local competition.

Many borrowers may already be searching for specialty options, which can help you to generate leads and connect to new buyers.

Digital Mortgages, Simplified

These great features can be available at your fingertips with the BNTouch platform. Our incredible, easy-to-use CRM system can help you nurture relationships, improve your marketing efforts, and work together with your whole team.

To request a demo, contact BNTouch today, and discover how our digital tools can transform your lending business.

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Tomi Pironti
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