The financial and mortgage industries shadow each other in many ways. So when we see extraordinary technological changes happening in finance, no doubt we’ll see and upheaval in the mortgage industry.
The Fintech revolution is more than digitizing the key processes; it’s an entirely new ecosystem that is also advancing the mortgage industry. By connecting the fragmented verification/approval network and streamlining the underlying process, Fintech is improving the customer experience, and reducing the cost and time it takes to close a loan.
Let’s take a closer look at Fintech and how it’s benefitting lenders, brokers, and borrowers alike.
Fragmented Systems Become Whole
One of the main difficulties in funding a loan is the sheer amount of data required to secure the funding. From pulling credit to employment verification to accounting where the borrower received their downpayment, there seems to be no end to the documentation. While digitization offers significant improvement, the more notable value of Fintech is found in artificial intelligence (AI) and interfacing.
Interfacing and smart collection can capture borrower data so that it can be easily accessed and translated across the mortgage processing board. But the advantage of Fintech does not stop there. AI can analyze the enormous amount of data to check for errors and possible fraud.
As a result of tying together the fragmented loan process with integration and AI, Fintech reduces the cost per loan, accelerates the timeline to close, and increases the rate of aprroved funding.
Blockchain and Lending
In banking, blockchain provides a more secure way to exchange data and move money. Just like AI and the interfacing mentioned above, blockchain reduces operational costs with an incorruptible database system. Since there is no single point of failure, money management can be transparent while remaining safe from hackers, thus reducing the cost per loan even further.
Blockchain may also one day replace our current “one-to-one” funding with a “many-to-one” system that will benefit borrowers. With a more expansive variety of mortgage options, lenders will be forced to compete, producing a borrower-friendly environment.
Creating the Borrower Journey
It’s not all about the cold hard, numbers. Fintech also improves the customer experience by reducing the friction to getting financing, making the loan process logical and predictable, and making human interaction meaningful and influential.
Mortgage apps with built-in calculators and scenarios curate a constant stream of knowledgable mortgage applicants. In a nutshell –Fintech primes the public into qualified prospects. With Fintech, a curious mortgage prospect is free to explore and consume information.
As they immerse themselves in the non-threatening world of mortgages, they become more keen on the idea of buying a home, with a preference for your “mortgage brand” to help make it happen.
Wherever the prospect is in their journey, mortgage professionals have several touchpoints in the consumer digital journey to engage and nurture it to closing.
Fintech continues to revolutionize the mortgage industry by improving the process for both consumers and lenders. Speed, reduced cost, more options for consumers, automation, security, and accuracy all point to a new era of digital mortgage that will benefit all.