Make 2019 the Year to Start Your Digital Mortgage Journey

house on circuit board
By Dan Putney

4 minutes

A six-step process for adding convenience for members to your home loan application process. 

Sponsored by Finastra.

The pace at which technology is changing is constant and rapid. Today’s borrowers want an intuitive, easy-to- use option for applying for a mortgage loan digitally. Borrowers are used to doing almost everything on their mobile devices, including shopping, buying, and paying for goods and services, and they expect the same convenience for their banking and lending needs.

For some credit unions, taking the first step toward offering mortgages digitally can be the hardest. Let’s explore how to get started with your digital mortgage journey. We have developed six steps that should help.

Step One: Map Your Borrowers’ Journey

Think about what steps borrowers will complete as they go through the application process and about any roadblocks they may encounter. A few items that should be considered include:

  • A dynamic online application that can be accessed from a computer, tablet, smartphone and even in-branch is optimal. It should be branded to match your website.
  • It should provide the early three-day disclosures and instant provisional approvals and prompt borrowers for missing information.
  • The online application should include the ability to send data entered directly into the loan origination system to help eliminate data entry errors. 
  • The application solution should provide complete and accurate disclosures of pricing and cash needed at closing.
  • The website should provide the ability for members to see the status of their loan applications and include a document portal for members to submit required documentation.

Step Two: Define Your Credit Union’s Internal Experience

Identify where automation can and will be most effective in supporting your business strategy. Look at your loan process and determine ways in which automation can increase efficiency and reduce errors while still improving the borrower experience.

Look at the entire application and underwriting process:

  • Is there room for improvement in the current application process and the way borrower documents are collected?
  • Can credit reports and other needed documentation be pulled automatically?
  • How are income, employment and assets verified?
  • How are appraisals, title reports and flood reports ordered and reviewed?
  • How are loan closing and funding managed?

Although the ultimate goal may be to optimize the borrower’s experience, reviewing internal processes to optimize efficiency will not only improve response time and overall service to the borrower, but also reduce processing time and costs associated with loan processing—a win-win for borrowers and the credit union.

Step Three: Creating a Business Case

Creating the business case for mortgage lending automation will ensure you identify the break-even point for the project. A well-thought-out, detailed business case will help ensure your request for funding will be granted. Answering the following questions will give you a good basis for your business case:

  • What will the ROI be on your investment? You’ll need to consider new business you expect to gain, as well as efficiency gains you’ll realize on the back-end. 
  • How much time will it take to implement? 

Step Four: Create a Realistic Roadmap 

The fourth step in the process is creating a realistic roadmap. Your credit union should have a clear plan of what the long and short-term roadmap looks like as well as an estimate for when you expect to reach project milestones. Once you’ve chosen your solution provider, work closely with that company to pencil-in important dates--such as when your implementation will start, important milestones in-between and when the project will be completed.

Step Five: Finding the Right Partner

Finding the right partner is one of the most critical steps in the journey. The vendor you choose should be responsive, available and provide a robust system that is easy for both borrowers and employees to use. The solution should be easy to implement with minimal cost and effort. With a number of solutions available, it’s important that your selection checks all the boxes that are important to your credit union’s unique needs and objectives.  

Step Six: Implementing Your Strategy

Once you’ve selected a technology partner, it’s crucial to gain buy-in from management and staff to ensure a successful and smooth implementation. A kick-off session clearly outlining your strategy should begin your implementation process.

Work closely with your provider to make sure your representative has all the data, staff contacts and other important information to complete the project.  Your provider should be able to guide you through all the steps in the process and work with you to schedule periodic meetings to make sure the project stays on track. 

Make sure staff training is in the plan and completed ahead of the roll-out date. It’s also essential that you define your internal and external communications plan up-front so there are no surprises upon go-live that can adversely affect the member experience.  

Following these six easy steps will help take away potential implementation pitfalls and help ensure your journey to digital mortgage lending transformation is successful. 

Dan Putney is managing director of Finastra, Lake Mary, Florida. He joined the company in 2011 and brought with him more than two decades of knowledge and expertise in the mortgage and mortgage technology industries. For a more information on this topic, you can take a look at Finastra’s complimentary on-demand webinar, Start Your Digital Mortgage Journey Today!

Compass Subscription