Mortgage lenders face the tremendous challenge of marketing to borrowers who may be hesitant to commit to such a large purchase. Mortgage applications are down 23 percent over last year, even as rates remain low, and home ownership has dipped in general, down to 63.7 percent in 2015. First-time homeowners are also on the decline; first time buyers make up 32 percent of all homeowners, down from a historical average of 40 percent. In short, it’s tough out there for a lender.
While there are some major changes underway which will open the pool of potential borrowers, mortgage lenders are still saddled with the hard job of attracting borrowers. The arduous and even exhausting mortgage application process is enough for an interested borrower to push off the process or starting it altogether.
The name of the game, then, is for mortgage lenders to make the difficult process as smooth, accessible and enjoyable as possible. It doesn’t have to be all endless paperwork and constant reports. Believe it or not, it can be a simple yet smart – and dare we say, even enjoyable – process from beginning to end.
- Use a self-service portal to make application access easier
The mortgage industry is shifting toward digitization of the mortgage process, reflecting the digital-first shift for applications across all financial sectors. Chief among this transition is the self-service portal, which allows borrowers to log in from the comfort of their own home or on the go from their smartphones or tablets. Through these portals, borrowers can engage with much of the process and fill out forms on their own time without demanding the attention of, or a face to face meeting with, a mortgage loan officer.
Not only does digitization make the mortgage loan application process easier for applicant and agent alike, but it supports the fast, simple and secure application process which borrowers want. By offering a step-by-step, self-service mortgage process, lenders make the process less daunting and more accessible to borrowers, without the worry of “lost” or repetitive paperwork. A more pleasant experience, in which the borrower has control and the option to complete the process at their leisure, goes a long way to attracting more business.
You can learn more about a CRM for Mortgage Lenders on our “What Mortgage and Loan Officers Need in a CRM” article.
- Communicate with a “millennial mindset”
As the millennial generation comes of age – two-thirds have yet to reach the average home buying age of 31 years old – the mortgage industry will need to shift to accommodate their preferences. That means out with phone calls and in with texts. Millennials have an aversion to phone calls, so too many phone calls may risk turning off a borrower. Switching to texting and email as the preferred form of contact conforms to the millennial borrower’s needs and puts their preferences first – a hallmark of good customer service. Phone calls should be reserved as a last resort only, when text-based communication proves ineffective or the borrower remains unresponsive.
- Motivate the borrower throughout the application process
Let’s face it, applying for a mortgage doesn’t sound like anyone’s idea of fun. But it doesn’t have to be all dry numbers and paperwork. Mortgage application can be made enjoyable by turning it into a journey, setting milestones and accomplishments along the way.
Much like merit badges for the Scouts or points per purchase at a coffee shop, incentives to complete each step of the mortgage process can help keep borrowers engaged at the points where they typically get bogged down in jargon and paper-pushing. Buying a home is often an exciting experience for borrowers at its core, but getting through the administrative aspect can be a drag. Remind borrowers that with each task completed they’re one step closer to stepping through the door of their new home. A pleasant – and even enjoyable — process generates repeat business and referrals.
Creating a clear, step-by-step process that walks borrowers through the requirements –whether through self-service portals, easier communication or motivational “rewards” – can help streamline the process, improve borrower responsiveness each step of the way and make the experience a pleasant one. An easier-to-navigate process which accommodates how borrowers want to approach the process, instead of being forced to use a drawn-out, paper-based, meeting face-to-face-based process, puts the process back in the control of the borrower’s hands. Remember, expedience, simplicity and convenience are the name of the game in the modern mortgage industry. Supporting a process that meets those needs is sure to leave you with satisfied borrowers.