Residential Magazine

Faster Closings, Lower Costs

Integrate homeowners insurance with the mortgage process to give buyers an edge

By Tom Kriby

In the past two years, inventory shortages and an incredibly competitive market made a home purchase nearly impossible for some potential home-buyers. Although many reports indicate the recent boom is slowing, due in part to higher interest rates, borrowers are still seeking out available homes.

Leads remain steady for new and existing homes. A market that seems to be cooling in some areas of the country remains red-hot in others. Even in locations where buyers are moving less impulsively, homes are in high demand overall.
An uncertain interest rate environment is one obstacle that lenders and originators are navigating with their clients. Higher mortgage rates and inflation are adversely affecting the debt-to-income ratios for many borrowers, who are looking to cut costs and close quickly. Streamlining the loan closing process with other necessary steps, like purchasing homeowners insurance, can create a more transparent process and provide added value for client relationships that result in on-time closings.

Independent agencies

Even though it’s necessary for a closing, homeowners insurance is often forgotten. Lenders that anticipate this are ahead of the game, and the smartest lenders work with independent insurance agencies.
Because an independent agency can work with multiple carriers, it’s easy to quickly find the right coverage for a consumer at the best price. Independent agencies can work with dozens of carriers, and these established relationships allow agencies to obtain homeowners policies even in areas where securing insurance on time can be difficult.
Homebuyers can take advantage of savings when an insurance policy is locked in earlier in the process. These savings can improve debt-to-income ratios, allowing borrowers to make improvements to a home, or to apply these savings to property taxes or closing costs. This has been helpful in a market where roughly one in three borrowers are first-time buyers. Providing these additional savings add value to a borrower’s relationship with their lender, which can contribute to retention efforts for future financing needs.

Tech solutions

In the past two years, giving buyers a competitive advantage in the market has been vital. Even before 2020, mortgage lenders were taking advantage of streamlined interfaces and innovative processes for their clients. These solutions added value to the homebuying experience and helped eliminate glitches.
Because the margin for error between an offer and closing remains thin, lenders must find every opportunity to foolproof their systems. One strategy that’s been effective is working with independent insurance agencies to simplify the purchase of insurance. Independent agencies can rush orders, leveraging technology and relationships with carriers to give lenders direct access to request-expedited proof of insurance.
For lenders, establishing a relationship with an independent insurance agency saves time, so there’s no scrambling to call around when a buyer needs insurance at the last minute. This can make all the difference when you’re working against the clock. Advanced independent agencies have been working to add even more speed to the process. An agency may even have a portal that allows a lender to request evidence of insurance in an expedited manner, with requests able to be processed in about an hour.
Simplifying the process for borrowers improves client satisfaction, expedites application steps and decreases last-minute delays with a more cohesive, transparent process. When the resources of an independent insurance agency are partnered with an intuitive platform, lenders can easily take on a proven model that creates a lead, sends a quote and orders a policy. Portals that use proprietary advanced programming interfaces can even condense this entire process into a matter of seconds.
As the world moves toward technology-based, fast-paced solutions, it’s becoming somewhat old-fashioned to send clients out to shop for their own insurance when it can easily be integrated into the loan origination process. Not only does it add convenience while preventing procrastination and delays, it also allows for a seamless process that mutually benefits both parties. When a lender has an integrated system, it’s easy to prequalify homebuyers, request proof of insurance, and process closing-date changes in minutes. For borrowers, they’re covered in a matter of a few questions and a few clicks.
● ● ●
Mortgage lenders can continue to help get borrowers into their dream homes, no matter how the market changes. Intuitive insurance systems can add value to the buyer-lender relationship and result in more on-time closings. And with integrated and streamlined processes, lenders can adapt to provide a competitive edge. ●


  • Tom Kriby

    Tom Kriby is vice president of client development and partnerships at Westwood Insurance Agency in West Hills, California, where he is responsible for national account management and business development. He has more than 16 years of sales, actuarial and risk-management leadership experience. Kriby previously served as assistant vice president of national programs for Universal North America. Prior to Universal, Kriby held roles with Benfield Inc., JPMorgan Chase and Tower Hill Insurance Group. He holds a bachelor’s degree in business administration from the University of Florida.

You might also like...