Demystifying the Mortgage Process with Tech-Forward Partners

The mortgage origination experience remains a mystery to many consumers. They know something happens after application but before they close on their new home or experience the benefits of refinancing — but what exactly that entails remains less clear.

That lack of transparency can lead to anxiety and dissatisfaction. By partnering with tech-forward title, closing and appraisal providers, real estate lenders have an opportunity to infuse clarity and transparency throughout the mortgage experience. This is especially critical when it comes to working with first-time home buyers. Using tech-enabled mortgage services can empower loan officers to nurture relationships with consumers, and strengthen their ties with real estate professionals

Here are several ways that banks can leverage partnerships to demystify the mortgage process.

Utilize digital appraisal and closing appointment scheduling tools
Today, two-thirds of consumers schedule their appraisal appointments over the phone. New digital scheduling capabilities that forward-looking vendors offer can help lenders provide a more predictable, efficient and consistent service experience. Appointment scheduling technologies allow consumers, real estate agents and/or loan officers to schedule their appraisal or closing appointment for the exact date and time of their choice. The best options match consumer preference with local appraiser or signing agent availability and provide instant confirmation for the appointment. That means there’s no ambiguity about when the appointments will take place.

Provide details about the appraiser or signing agent prior to the appointment
A 2020 consumer survey showed that 61% of consumers received contact info for their appraiser before their appointment, and only 20% were provided with their photo. As a result, more than 30% of consumers weren’t confident about the names of their appraiser and appraisal management company (AMC) prior to their appointment. Today’s consumers are accustomed to ridesharing apps that provide details about their driver. Digital scheduling platforms can bring that same clarity to the appraisal and closing experience, increasing consumer confidence in the process.

Use appraisals to help consumers understand the value of their home
Lenders can use the appraisal report to deepen engagement with borrowers and help them become informed. Utilize your provider’s standardized appraisal format to craft template-based content that explains each section of the report. This empowers consumers to identify and resolve potential errors, helps them understand the information lenders use to make underwriting decisions and provides user-friendly insights about their property and surrounding neighborhood.

Allow borrowers to engage with the closing process ahead of the final appointment
Nearly 20% of consumers said they did not feel well informed going into their closing appointment. This indicates that lenders can do more to help borrowers — especially among the important and large first-time homebuyers demographic — familiarize themselves with the mortgage origination process. When lenders and their strategic partners proactively offer borrowers insights, education and advice to navigate the closing experience, they can help alleviate this lack of confidence.

Implement virtual closings
Borrowers expressed the least satisfaction with the amount of physical paper they had to sign at the closing appointment. Implementing a virtual closing strategy can address that pain point, while promoting transparency. Giving borrowers the opportunity to review and sign loan documents prior to the final closing appointment goes a long way toward improving consumers’ understanding and confidence in the mortgage obligation and provides them with the mortgage experience they expect.

Source: The above relies on insights and data from the white papers ”Modernizing Appraisal Management Practices” and “Extending the Digital Mortgage Experience to the Closing Table” – independently produced by Javelin Strategy & Research at the request of ServiceLink.