Residential Magazine

Borrowers Are on Their Phones and You Should Be, Too

The digital-mortgage experience needs to account for the devices

By Susan Graham

In today’s competitive mortgage industry, creating an exceptional client experience is essential. Borrowers in this digital, I-want-it-now-age expect the mortgage process to be quick, easy and transparent.

Many mortgage originators have invested in new e-mortgage technology, including web applications, to satisfy borrowers while containing costs. There’s strong evidence that people prefer to do many parts of the borrowing experience online.

At the same time, more and more people are using their mobile phones to conduct business online. This poses a question for originators: How should they reach a digital borrower on their phones?

More specifically, should originators build mobile-optimized websites? Or should they use mobile apps popular with so many other businesses?

Digital advantage

Using web applications in conjunction with loan-origination software streamlines and provides transparency throughout the loan-origination process when the two systems are designed to interact with each other. Web applications allow borrowers to apply for a mortgage 24/7 without assistance from an originator.

Borrowers also can attach supporting documents online for submission to their originator and view loan documents and the status of their application online. Throughout the loan-application process, borrowers can easily keep abreast of any additional documentation requested — whether for verification, underwriting conditions or for closing — to speed up the entire process and get them to closing more quickly.

Thanks to cross-device interaction, borrowers can start their application on a mobile device and finish it on their laptop (or vice versa). Web applications expedite the loan-origination process, benefitting borrowers and lenders.

According to Fannie Mae’s National Housing Survey of 3,000 people, 72 percent of respondents prefer to complete their mortgage application online, while 66 percent want a fully digital mortgage process. The percentage of homebuyers who actually apply online (versus merely expressing a preference to do so) is somewhat lower but still significant.

Forty-three percent of borrowers applied for mortgages digitally in 2017, according to a 2017 JD Power survey of homebuyers. More than 70 percent of borrowers submitted at least some supporting documents to the lender via email, an app or a website, according to a survey by Discovery Home Loans. Homebuyers who used online tools to submit their documents said it saved time (92 percent), helped them stay organized (83 percent), and cut down on paperwork (68 percent).

Web applications facilitate communication between borrowers and lenders, allowing lenders to respond promptly to borrowers. With its plethora of loan products, unfamiliar jargon and complicated forms, the mortgage-application process can be intimidating, particularly for first-time buyers.

If the loan-origination system and the web application talk to each other, however, even borrowers who submitted their loan application face to face with a loan officer because they needed more hands-on assistance, can continue the process via the web application.

According to an American Bankers Association survey, many borrowers lack confidence in their knowledge of the mortgage process. Only 34 percent of survey respondents rated their knowledge about the mortgage process as above average or excellent. Only 28 percent of respondents understood the difference between the interest rate and the annual percentage rate of their loan. Borrowers rely on their lender for information about the mortgage process.

In another survey, 24 percent of borrowers indicated that they learned the most about the mortgage process from both the internet and their originator, so it’s important for originators to educate borrowers. Clients expect prompt responses to their questions and requests for assistance.

Client satisfaction drops sharply for each day a borrower spends waiting for a lender to respond to their inquiry. Web applications allow greater interaction between borrowers and lenders, who can communicate updates on the loan process, request additional information or supporting documentation, provide disclosures and answer borrowers’ questions — all in a timely manner.

Furthermore, web apps may reduce the number of incomplete applications and allow for a greater percentage of submitted applications. Providing the loan officer an easy method to identify incomplete applications started in the web app and the ability to take over the loan application to complete it for the borrower increases the success rate for both lender and borrower.

The reason for incomplete applications can be as simple as the borrower being overwhelmed by the application-submission process. Someone reaching out to them to help them through the process, providing a more hands-on approach, may be all they need.

Mobile app vs. mobile optimized

Borrower-facing and other web applications can be accessed via mobile-optimized (aka mobile-responsive) websites or downloaded mobile apps. With mobile apps so popular for everything from ordering lunch to paying bills or scheduling appointments, they may seem like the obvious choice for mortgage lending.

Mobile-optimized websites that provide the convenient access that borrowers expect, while providing other advantages, may be the better choice, however. Mobile apps typically have less functionality than mobile-optimized websites. Borrowers using their bank’s mobile app, for example, may be limited to viewing account balances and making payments.

They may be able to see and do more on their bank’s website. Borrowers may be able to view more detailed account information, for example, and take advantage of additional functionality not available on the mobile app.

Mobile-responsive websites are usually quicker and more efficient for originators and borrowers alike. Borrowers can access their loan information on their bank’s website without downloading a mobile app. Updating mobile apps is more time-consuming for the developer, who must submit new versions to the Apple App Store and Google Play to be granted approval.

Upon approval, the update must be made available in the app stores, and the borrower must download the newer version to get the changes. Therefore, it takes longer for borrowers to receive updates via mobile apps.

Borrowers have immediate access to updated information on a mobile-responsive website, without even being aware that changes have been made. Although consumers are accustomed to mobile-app updates on their mobile devices, why make a borrower download an app, possibly several times if there are updates, when the mobile app serves such a short-term, specific purpose?

Whereas mobile apps are specifically developed for the different types of operating systems used by particular devices (Apple versus Android) and must be approved by the Apple App Store and Google Play, mobile-responsive websites are not device specific and should work easily on all devices (all mobile devices and a PC browser). To determine whether a website is mobile-optimized, do the following:

If you’re accessing the site via a PC, resize your browser using the small button with a square in it in the top right corner. If the appearance of the text, images and menus changes as the window gets smaller, this site is responsive. If the page looks cut off or images are not fully visible, the site is not responsive and probably won’t work well on mobile devices’ smaller screens.

Web applications used in conjunction with leading-edge loan-origination software make the loan- origination process more convenient, efficient and transparent for borrowers and lenders. Mobile-responsive websites, with their greater functionality and efficiency, may be a better choice than mobile apps to put loan applications and disclosures at borrowers’ fingertips.


  • Susan Graham

    Susan Graham is president and chief operating officer of Financial Industry Computer Systems Inc. (FICS), a mortgage-software company specializing in cost-effective mortgage loan origination, residential mortgage-servicing and commercial mortgage-servicing software for mortgage lenders, banks and credit unions. FICS’ software solutions use Microsoft .NET Framework and provide customers the flexibility to choose an in-house or cloud-hosting solution. FICS also provides document-management and web-based capabilities in its full suite of products.

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