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Mortgage technology has changed everything — and the evolution is far from over.
Until now, most of the biggest technical evolutions have been reserved for the industry players with the most money. Large companies can afford to use expensive service providers to white label products or hire teams of developers to build customized software. Quicken’s Rocket Mortgage is a powerful product, but not many companies have the capital required to come up with something comparable. The same is true of loanDepot’s mello — plenty of power with a price tag to match.
Smaller banks and brokers should not despair, though. The day they can finally offer lightning-fast mortgages is just around the corner. New tools like ARIVE, debuted at a recent conference in Las Vegas, promise to put big-brand power in everyday hands. From new technical partnerships to a revolutionary mindset about how the mortgage process works, change has arrived.
But as exciting as the changes will be, major evolutions rarely happen without effort, and this one is no exception. For brokers to offer the speed that tomorrow’s buyers crave, they will first need to embrace the technology that makes that speed possible.
Mortgage Technology Makes It Possible
Imagine trying to learn Photoshop without first learning how to operate a keyboard and mouse. It wouldn’t just be hard — it would be downright impossible.
For brokers, the same principle applies. Only by diving headfirst into the technologies available today will brokers be able to use the technologies of the future to provide a better customer experience.
Today’s mortgage technology can do all sorts of cool things. Borrowers can upload documents into online collection hubs with bank-level security. Anyone can fill out a secure loan application online, either from a desktop computer or smartphone. No matter how many different accounts people have, they can view most of them all through one interface, like Mint.com.
This type of modern technology empowers brokers to provide unprecedented levels of customer service. Rather than perform hard credit pulls, brokers can now use soft pulls to get accurate readings of borrower credit scores. With breaches like the one at Equifax in the headlines, minimally intrusive methods like this make borrowers feel more comfortable.
At the same time, brokers still need to provide the same level of service they would with hard pulls. Using the information from soft pulls and other data-gathering tools, brokers can present initial product and pricing information tailored to each client. The process is simple, effective and customer-friendly.
These advancements have created an environment in which customers expect premier treatment from every broker, not just the big ones. Imagine how those expectations will evolve as brokers get even better tools. Borrowers will not only expect brokers to provide incredible service, but they’ll expect them to do it quickly, too.
Mortgages Faster Than The Speed Of Light
Until recently, speed was never an issue in the mortgage process. People knew mortgages took a long time to close, which was fine because they wanted the time commitment to match the weight of the financial one.
Today’s borrowers are different from yesterday’s. Millennials (and their technically adept parents) have become accustomed to the way technology speeds up life. According to new research, 66% of homebuyers would prefer to handle their mortgages entirely online. These people perform research on their own so that when it comes time to buy, all they need is competent guidance and a place to sign.
Brokers without experience in modern tech might call that a pipe dream, but those familiar with today’s tools know better. Within a few years, the entire mortgage process will take place within a single digital mortgage platform. APIs will communicate between escrow and title systems behind the scenes. All the inefficient paper processes of the past will give way to faster, better methods.
This evolution will not cut brokers out of the industry. The same study that discovered people want online mortgage options also found that 65% of homebuyers want someone to explain options and terms. Borrowers will still need brokers to handle their transactions, explain the rules and advise them on the best paths forward. However, tomorrow’s homebuyers will not need to gather papers before heading to a broker’s office. They will simply log in, upload and ask questions along the way.
Many different technologies will fuel this transformation. Artificial intelligence and machine learning, for instance, will make it easier for brokers to predict the needs of individual buyers before buyers know they need something. Blockchain will create immutable audit trails, which will in turn allow all parties to move forward with confidence in the accuracy of disclosures and documents.
Put together, these factors will reduce the mortgage process from weeks to a day or two at most. Borrowers will be able to find their dream home, make an offer and take off in a moving truck within the space of one long weekend. To borrowers and brokers of the past, that might sound crazy. To those of the future, though, mortgages will just be one more thing accelerated by technology.