What Today’s Borrowers Want
Chances are you have heard the criticism. Our industry is being left behind when it comes to innovation. Mortgage lenders are notoriously hesitant to embrace new technologies. The pace of change is slow and when it does occur, it’s often driven by regulation or GSE policy.
Consider this: It took until 2011 for PDFs to become the standard for home appraisals. And this wide-sweeping change only came about because the Federal Housing Finance Agency emphasized the growing need for the electronic delivery of appraisals.
But then came the COVID-19 pandemic, which we quickly discovered wasn’t just life-altering, it was industry-altering as well. According to a new McKinsey Global Survey, U.S companies accelerated the digitization of operations by three to four years and the amount of technology products in their portfolios by seven years. And we experienced this rapid acceleration in our industry as well, too, as the pandemic forced lenders to reevaluate their technologies for connecting with customers, leads, and prospects as well as managing the home financing process.
Yet in this period of industry change—as websites, mobile apps, and videoconferencing platforms make transactions faster and more convenient; as the frequency of showings, appraisals, and closings occurring online increases—today’s borrowers have made this clear: They do not want the mortgage and real estate processes to take place entirely online.
Stated simply, customers still crave that human touch.
In the latest Volly Insights post, we will explore how mortgage lenders are adapting to our post-pandemic world by giving borrowers a best-of-both-words approach: high-tech solutions supported by high-touch service.
A hybrid approach
Due to the complex nature of the home financing and real estate processes, it is unlikely that a borrower would be willing to navigate both without a single live conversation. Even a majority of Generation Z, a demographic that grew up communicating via text messages and video calls, said in a Freddie Mac survey that they would prefer a level of face-to-face interaction with mortgage professionals during the purchase of their first home rather than carrying out the process entirely online.
As a prominent mortgage industry CEO recently said: “You can’t automate relationships.” For this reason, more lenders are offering borrow journeys that provide a hybrid approach: one that simplifies the mortgage process through cutting-edge technologies while emphasizing the personal element by offering human touch points throughout, particularly when it comes to engagement and communication.
Here is how this high-tech/high-touch hybrid approach works and what it means for mortgage professionals and borrowers alike.
A focus on the “human” element
A digital lending process frees up mortgage professionals from the more routine tasks associated with home financing, giving them the ability to focus on the “human” element of lending. According to an Ellie Mae Borrower Insights Survey, 60% of borrowers who did not complete their online mortgage application did so because the process was too long. Borrowers also said a reason for needing multiple sessions to complete their applications was because they had not gathered necessary information. With more free time, mortgage professionals can provide vital support to these borrowers during this essential step.
Digital technologies also give mortgage professionals more opportunities to educate borrowers throughout their homebuying or refinancing experiences—a much-needed service in today’s lending environment. The key takeaway from a recent report from data company Finicity was that 89% of respondents said the loan application process was just as stressful or more stressful than purchasing a home.
A special kind of guidance & support
Digitization makes the home financing process more streamlined and less stressful, but when a borrower has a question or concern that cannot be addressed by, for example, a chatbot, a mortgage professional can step in and help. This is another example of how automation can only take the process so far before a human touch is necessary.
Whether it is evaluating complex financial information, solving unexpected problems that arise, or connecting a borrower with other parties in the financing process, mortgage professionals deliver guidance and support that cannot be duplicated with technology.
The need for personalization
The mortgage process is full of big, potentially life-changing decisions. Whether the outcome is a new home purchase or a loan refinance, the emotional and financial impacts are immeasurable. So while today’s cutting-edge technologies have made transactions faster and more convenient, they also risk making relationships appear impersonal and inauthentic.
After all, who wants to complete one of the most important transactions in their lifetime without some aspect of personalization? It’s why lenders are providing a human touch by offering:
- Consistent, personalized messaging aimed at engaging with customers, boosting referral numbers, and driving renewal business.
- A robust library of content created with a personal touch—from birthday postcards and loan anniversary touchpoints to holiday greetings and referral messaging.
- Customizable closing day gifts that deliver the perfect thank you to borrowers.