Many companies have been forced to go digital due to the current public health pandemic. Many brick-and-mortar companies that were used to having people come in, now need to do most, if not all their business online. This digital form now includes the mortgage industry, where buying a home or commercial property in person is limited due to health restrictions.
The question now is the digital world here to stay and the new way to obtain a mortgage? Is technology improving access to a mortgage, even after the pandemic is over? Let’s look at how the digital mortgage works.
What is a Digital Mortgage?
A digital mortgage is an online mortgage application from beginning to end. This also includes centralized automated underwriting and processing. The entire process is done without going into an office building or without talking to an actual mortgage professional. All necessary documentation is uploaded onto a website for loan approval as well. The human aspect is on the receiving side of the documentation to finalize the mortgage.
Is a Digital Mortgage Approval Faster?
Studies show that a digital mortgage takes on average seven days faster for approval than a traditional mortgage. This could be beneficial when a traditional mortgage takes approximately 52 days for approval. Refinancing a digital mortgage takes between 9-14 days faster to process than a traditional mortgage.
A digital mortgage is not perfect, neither is it a new process. Some digital companies might not have user-friendly online processes, causing confusion for the customer. The lack of a personal connection reduces the reception of information between the customer and company. This can impact customer service.
Protect the Environment with Online Processing
A digital mortgage is great for the environment by reducing paper usage for mortgage companies. The Environmental Protection Agency (EPA) stated the average company uses 10,000 sheets of paper yearly, which equals 1.2 trees. This rate could be hired for a mortgage company annually.
The paper industry accounts for the world’s fourth largest consumer of energy. When making paper, 76.5 million BTUs are used over the life cycle of paper. This is like operating 91 residential refrigerators annually.
Reduces Costs with Online Application
An online application also reduces printer ink, filing, and postage. The mortgage staff save time and energy by not printing out, mailing, and filing statements. Some companies find that it costs approximately $360 in labor and processing time to find and recreate a misplaced file.
Can Help Mortgage Customers Access Documents Easily
According to the American Bankers Association, 72% of Americans access their bank account statements online or through mobile platforms. Many mortgage customers view paper documents as cumbersome and wasteful, preferring online documentation.
J.D. Power & Associates found that many Americans prefer online banking. Millennials make up 37% of recent homebuyers and the study showed that 49% of millennials do online banking. This population expects immediate access to information.
Provide Efficiency for Mortgage Companies
Digital mortgage applications improve efficiency for customers and mortgage companies that provide immediate access to mortgage information and statements. When mortgage brokers provide a user-friendly website with accurate information, customers make less calls to live agents. Many customers like self-service options, where they can search the mortgage company’s website for answers before calling.
Enhance Payment and Communication With Your Customers
Digital communications with customers help mortgage companies educate customers on the process and send reminders for payment as well. If you’re not already using digital mortgage application programs, now is the time to go digital. Digital communications for services can also attract younger customers, who are more eco-friendly and tech-savvy.
Convenience for Your Customers
Online services encourage customers to make their mortgage payments early or on-time, reducing the need for notifications of late payments. Online documents are more secure than paper documents in a file cabinet or on a desk. Digital documentation also qualifies for government regulations.
Digital mortgage services streamline mortgage application processes, by reducing costs for both customers and mortgage companies. Mortgage online services with applications and payment options are necessary to attract today’s consumers. If you’re a home mortgage company, find out more information about digital mortgage application services to enhance your mortgage application process for your company and for your customers.