The average time to close a purchase mortgage was 49 days in April, down from the 46 days one year ago in April 2020, according to a recent report from ICE Mortgage Technology.
Fingers have been pointed at long lead times with appraisers, inspectors, and other elements of the home purchasing process significantly contributing to delays, more than general capacity issues from lenders. Still, finger-pointing doesn’t get homebuyers into their new home sooner.
Many homeowners, even those who’ve purchased before, don’t know everything that goes on behind the scenes to get their mortgage application underwritten and closed. Briefly explaining the entire mortgage loan process and the players involved can help borrowers understand delays if they crop up later.
Originators who set realistic expectations of the mortgage process with their borrowers can establish trust upfront, so their borrowers are less likely to feel frustrated if issues arise later.
Setting expectations can be as simple as providing every borrower with a “Needs List” early in the process. If the list is supplied following pre-qualification, the borrower can gather the documentation while house hunting. Calling each borrower while they are house hunting can be a time to check on their progress and answer any questions.
If the borrower is originator shopping, providing the “Needs List” at the conclusion of your first meeting can help you stand apart from the competition.
Research from the STRATMOR Group reveals that this simple act can also affect your Net Promoter Score (NPS). When borrowers receive a checklist at the beginning of the process, the NPS the borrower gives the lender is 82. Borrowers who do not receive an upfront checklist quickly get confused and frustrated, and NPS plummets to -27, which is the difference between a borrower who will promote you to friends and family and one who will badmouth you.
Originators who provide their white-labeled FinLocker app to each borrower when they first entered their sales funnel or following pre-qualification have a competitive edge in establishing a trustful relationship. The app has tools to get borrowers mortgage-ready sooner and to the closing table quicker. Document and data gathering is simplified and helps to facilitate a streamlined mortgage application process. Educational videos and articles explain the mortgage process, terminology, and homeownership in English and Spanish.
In an industry where most originators offer the same products and have little flexibility with pricing, it’s the service provided to each customer that will give you a competitive edge.