It’s no secret that the home lending process is broken.
Lenders need to make responsible decisions based on multiple documents and pieces of paper. They’ve set up rigorous workflows to catch errors in information. Meanwhile, consumers are trying their hardest to comply with the dizzying array of requirements that stand between them and their dream home.
Improving the current loan origination process requires a transition to the digital sphere, but reinventing the wheel isn’t necessary. In this article, we’ll tackle the issues of the existing home lending process, along with actionable tips and best practices to digitize and streamline the process.
The future of the home lending process
The mortgage process was created decades before online banking – or even the internet – became widespread. Since then, the technology landscape has fundamentally shifted.
The time is now to introduce innovative technology into the traditional home lending process. Digital lending technology that smoothly integrates with loan origination software improves the entire experience for both borrowers and lenders.
Building trust early with a guided user experience increases borrower engagement and encourages connectivity to source data. Industry-leading digital lending platforms see a majority of users connect their financial accounts, giving lenders data-rich applications that streamline their decisioning process. These user activities shave days off funding times and translate to dollars saved for every loan application.
Sourcing the data is only one part of the battle to drive a smarter home lending process. For the roughly 75% of applications that require advanced document and data requests based on manual document review, automated follow-up workflows allow borrowers to satisfy these requests at the start — and not revisit the process later.
A best-in-class home lending process technology not only flags large deposits where appropriate, but also instantly presents the borrower with a simple workflow to get a signed letter of explanation within seconds. The same is true for other data from the application such as gift letters and income types. Data connectivity allows lenders to request a large number of operational items — normally occurring later in the process — much earlier, in a simple way for the consumer.
APIs and pre-built integrations
API-driven connectivity now makes it possible to access validated source data. With accessible data, lenders can freely redesign the lending process to be both more efficient and delightful for borrowers. People expect a lending experience on par with consumer giants like Apple and Netflix; data connectivity now makes it possible.
We’re not the first ones to leverage data accessibility in innovative ways; budgeting apps like Mint have been helping people better understand their finances by connecting directly to their assets and accounts for a decade. Even the U.S. government is on GitHub leveraging APIs to connect data sources to tackle issues like voter registration.
Digitizing the loan origination process: 4 actionable steps
Here’s what you should consider to streamline the home lending process at your financial institution.
1) Understand what functionalities you need
When creating a list of desired functionality, evaluate your business and customer pain points to define where your organization’s lending tech stack needs improvement. Be sure to consider future business goals as well, so your technology will help you achieve those goals.
2) Assess the loan origination process
Map out both the borrower and lender journeys to determine how digital lending technology would play a role or provide benefits at each step. Each mortgage lender approaches demand generation, servicing, and processing slightly differently, so the specific amendments that benefit each institution differ on a case-by-case basis.
3) Review loan origination software integration options
Your findings will determine what kind of loan origination software will best fit your organization’s needs.
Explore the benefits of Blend’s integrations.
4) Configure, deploy, and implement
Your digital partner should help ease with top-class change management practices. In particular, look for providers that outline implementation strategies as part of the sales cycle, offer dedicated resources to support implementation, and that offer a long-term vision for how they will continue to support you over the life of your relationship.
Enhance the home lending process with Blend
Incrementally improving the current process won’t get us where we need to go; the future of better lending must be rebuilt around a data-powered experience.
Blend’s platform is designed to reduce tasks like reviewing documents so lenders can focus more on their customers. This form of intelligence enables lenders to prioritize meaningful conversations that add the most value to the customer relationship.
On top of that, Blend’s platform leverages insights into consumer behavior to improve efficiency for every application. It uses artificial intelligence to detect patterns and offer targeted or personalized recommendations for your team.
At Blend, we’re using verified source data to build a consumer’s complete financial profile. Lenders no longer have to rely on built-in redundancies to mitigate risk and are now able to quickly understand any borrower’s financial situation.
Using a combination of rules and machine learning can drive a faster, smarter process. Blend opens the door for lenders to reduce processing time, cut costs, and close more loans than ever before.
Working together to reimagine what’s possible
Blend is forging the future of the home lending process. Our technology unlocks opportunities to remove the frictions that bog down lenders and borrowers. Our goal is to bring efficiency and higher customer satisfaction not just to home loans, but to all lending experiences.