Last year, global consulting firm McKinsey & Company shared some stats about the U.S. mortgage market that probably shouldn’t come as a surprise to the average mortgage professional: Roughly two-thirds of recent homebuyers surveyed in 2023 were comfortable completing all mortgage-related steps entirely through digital channels, while more than half of homebuyers actually completed the entire loan process online, either through their lender’s website or a mobile app.
Of course, just because more borrowers are getting mortgages through online channels, doesn’t mean they were satisfied with the process. In fact, McKinsey’s survey discovered that homebuyers were least happy with the very beginning of their loan process, when they were shopping for rates, looking for the right mortgage and sharing documents with their lender.
This reflects the shortcomings of traditional point-of-sale systems, many of which help collect initial information from borrowers but fail to improve either borrower loyalty or the origination process in meaningful ways. But thanks to modern digital technologies, this is beginning to change — and just in time for the next wave of homebuyers.
Outdated technology
Navigating the current housing market is no small feat for mortgage professionals. Between high interest rates, limited housing inventory and rising home prices, most loan officers are putting more time and energy into each transaction than they normally would. At the same time, many mortgage organizations have either reduced staff or taken other cost-cutting measures since rates soared two years ago, creating production hurdles that have slowed and lengthened loan processing timelines.
Of course, the average mortgage professional can do little to control these factors. But they can tilt the odds in their favor. Originators, for example, can create deeper client relationships by being a source borrowers can trust and delivering exceptional service to both clients and referral partners. These are the cornerstones of creating repeat business. At the same time, the ability to streamline the loan process by reducing manual tasks is equally vital.
Automating routine tasks can free up time for loan officers to focus on more complex and nuanced aspects of their job, like advising clients and navigating tricky financial scenarios. In this sense, digital tools that expedite preapproval processes can be extremely helpful at moving buyers more quickly through the loan process — especially in a multiple-offer scenario in which speed can mean the difference between a client securing a home and missing out.
Still, there are plenty of point-of-sale systems in the industry that promise to help mortgage professionals achieve both goals. The problem is that most of them were built years ago, before the emergence of digital, cloud-native solutions.
As a result, most systems aren’t easy for borrowers to use and are poorly integrated into a loan officer’s mortgage platform. They also lack the type of automation that would provide borrowers with a seamless experience or prevent loan officers, processors and underwriters from having to repeatedly request information and other documents, which not only slows down the origination process but ends up frustrating borrowers.
“Fortunately, new point-of-sale technologies have emerged that support a seamless mortgage process from application to closing.”
Fortunately, new point-of-sale technologies have emerged that support a seamless mortgage process from application to closing. These solutions aren’t just capable of transforming the mortgage experience, however. They also help solve the two biggest challenges loan officers face today.
Borrower expectations
The McKinsey report identified several of the top expectations borrowers have of their lenders. According to the consulting firm’s survey of borrowers who recently closed on purchase loans, among these expectations were an early certainty of approval and exceptional service. Both are key to the goal of developing deeper customer relationships at the point of sale, and it is here where today’s digital point-of-sale technologies truly shine.
Except in cases where the advice of a trusted mortgage professional is truly needed, most borrowers appreciate being in control of their financial decisions. Digital point-of-sale platforms cater precisely to this need. Today’s products allow potential homeowners to shop and compare mortgage rates, pricing and closing costs, as well as submit applications for mortgages that best fit their needs, from any device at any time — all without a loan officer’s assistance. Borrowers can even perform side-by-side loan product and pricing comparisons.
Once they submit a loan application, these systems can auto-generate initial disclosures, collect signed disclosures from the borrower and provide the borrower with an immediate pre-approval — again, without the loan officer ever lifting a finger. While borrowers enjoy a level of autonomy that enhances their experience and makes the mortgage processes more accessible and less intimidating, the loan officer is still kept in the loop throughout the process with real-time updates and notifications via email and text. This allows loan officers or their assistants to jump in and help guide the borrower through the process at any time — and from any device.
Ultimately, this seamless blend of independence and support strengthens the bond between borrower and loan officer and helps foster relationships that not only increase the likelihood of successful closings but extends beyond the transaction. In other words, it becomes a memorable experience that a borrower is more likely to tell their friends and family about. But again, this is only one piece of the puzzle that modern point-of-sale technologies can help mortgage professionals solve.
“Cloud-native digital point-of-sale platforms ultimately enable both loan officers and lenders to accelerate their loan production processes and improve overall loan quality.”
Seamless fit
Today’s cloud-native digital point-of-sale technologies also bring a host of automation capabilities that significantly reduce manual labor, allowing loan officers to concentrate on what they do best — interacting personally with borrowers to navigate complex financial decisions.
At the heart of this transformation is the integration of the digital point-of-sale system to a loan officer’s loan operating system, helping data flow seamlessly through both systems, eliminating the need for duplicate data entry and reducing the risk of errors. For example, when a borrower applies for a loan, the information they submit can automatically populate across other platforms. This not only speeds up the processing time but also ensures that the data remains consistent and accurate throughout the loan life cycle.
The real-time data processing capability from digital point-of-sale systems also helps provide the loan officer with up-to-the-minute information on the status of a borrower’s loan application. The flow of data allows an originator to address any issue promptly and keeps the process moving forward without unnecessary delays.
Moreover, these systems can automatically verify borrower information, conduct credit checks and assess risk using sophisticated algorithms. This level of automation reduces the workload on human underwriters and speeds up decision-making processes, leading to quicker pre-approvals and more efficient overall loan processing.
Another significant advantage of the digital technology is its ability to automate routine tasks such as document management, compliance checks or fraud detection. The technology even allows loan processors and underwriters to leverage artificial intelligence in loan decisioning and automate the process of ordering appraisals or valuations, which is one of the most common sources of delays in the production cycle.
Such automation frees up loan officers and their teams from the time-consuming work that gets in the way of guiding clients through particularly complex transactions or overcoming obstacles that could potentially delay any closings. By leveraging task-based workflows, configurable rules and simplified communications with all parties, cloud-native digital point-of-sale platforms ultimately enable both loan officers and lenders to accelerate their loan production processes and improve overall loan quality.
Furthermore, because modern platforms are built to deliver mortgage applications in a protected cloud environment, they offer loan officers the flexibility and convenience to access critical information and perform key tasks from anywhere. This mobility is essential in today’s fast-paced market, where being able to respond quickly to client inquiries or update loan files on the go can make a significant difference in both customer satisfaction and the ability to close on time.
In his 1913 autobiography, President Theodore Roosevelt shared the following philosophy: “Do what you can, with what you’ve got, where you are.” The problem is that many mortgage professionals aren’t fully aware of “what they’ve got” — current access to digital point-of-sale systems that are capable of building stronger borrower ties and smarter loan manufacturing processes.
It also bears mentioning that many housing experts are expecting some relief in interest rates in the coming months, which, while welcome, will certainly increase competition for business. If there was ever a time to pay attention to the Rough Rider’s immortal wisdom, that time is now.
