Despite the requirement to provide closing disclosures to inform homebuyers of their transaction costs, many homebuyers are so focused on finding a home and closing quickly that they often overlook the details and arrive at the closing table, surprised by the hidden costs and what’s in their closing document.
A recent Homebuyer Sentiment survey by Qualia found that just one out of every five buyers understood all of the documents they were signing at closing. Respondents also indicated that closing was the second most stressful part of buying a new home, only topped by the actual moving-in process.
The survey found that despite the requirement of closing disclosures to inform homebuyers of their transaction costs, consumers still lack an overall awareness of the costs associated with buying a home, as 44% of recent homebuyers were surprised by higher-than-anticipated transaction costs.
Homebuyers responding to the survey desired multiple touchpoints to receive information prior to closing. More than half (55%) of future homebuyers would like to receive information face-to-face about the closing process prior to the closing date and 44% would like to receive information over a secure mobile app or web-based portal. The survey data demonstrates the importance of empowering consumers with education via their preferred channel for engagement.
Educating homebuyers early in the loan process on the closing process contributes to a seamless home buying experience. Start by preparing a fact sheet on the closing process, including what closing costs cover, what’s in the closing documents, and a list of “Do’s” and “Don’ts” to help homebuyers avoid common mistakes that could put their mortgage in jeopardy. Turning the “Do’s” and “Don’ts” list into a series of social media posts and writing insightful blogs on the closing process can give you a competitive edge by establishing you as a thought-leader in your marketplace and attract leads to your business.
Guiding buyers to close with confidence helps to create customers for life and generates referrals, too. According to data from STRATMOR Group’s MortgageSAT Borrower Satisfaction Program, monitoring and improving the end-to-end customer experience increases the Net Promoter Score (NPS). When you give the borrower adequate notice of the closing and call the borrower to discuss the required closing funds, you are rewarded with an NPS of 83, which nearly guarantees the borrower will promote you. When you don’t, NPS falls to -17, which indicates borrowers will more likely badmouth you than promote you.
FinLocker can relieve the pressure of nurturing a large pipeline to get mortgage-ready so that you have more time to assist borrowers with their mortgage applications and closing preparations. Watch this online demo or attend a live demo to see how to increase your lead to loan conversion.