The importance of borrower experience in mortgage lending

Getting a mortgage is a big deal. You’d think all lenders would recognize this and make extra effort to ensure the borrower experience is as smooth as possible. But just do a little online research, and you’ll learn that most lender reviews and blog posts reveal that the majority of borrowers are unhappy, dissatisfied customers. 

Right now you may be thinking, “Of course the reviews are negative because dissatisfied customers are much more likely to report their bad experiences than happy customers are.” Or from personal experience you may be of the opinion that nobody is "overjoyed" when it comes to getting a loan and paying it back, especially first time home buyers. But even one happy customer can create a ripple effect of referrals and repeat business, so why not strive for excellence with every client?

Even though the mortgage process can sometimes be bumpy and confusing, if lenders have sufficient infrastructure, support staff, and an experienced loan officer who takes his/her job seriously, they can shake hands at closing with happy, loyal (and repeat) customers. It doesn't make much sense to expect Mercedes-Benz quality and service when you've chosen to buy a Kia, now does it? The same can be said of lenders who take shortcuts in their processes to cut costs in order to “ram loans through” as quickly as possible. If borrower experience is important to the institution, that extra attention will not only be appreciated but could win customer loyalty for years to come.

So if you’re a lender, how can you provide a superior borrower experience for your mortgage loans? Below is a list of common concerns to be aware of as you strive for borrower experience greatness.

Why didn’t we get the loan

Educate borrowers about what kind of credit risk they present sooner than later. This is the purpose of the pre-approval process. Is there anything more discouraging for both parties than getting pre-approved just to get rejected a week or so into the process? Do some initial investigation into credit score, credit history, cash/savings and job history before starting any initial paperwork. The feeling of being informed and taken care of will most likely bring the borrower back once they’ve fixed the things that made them high risk.

The amount of paperwork and documentation was ridiculous!

The lending process can cause enormous amounts of anxiety and stress. Sometimes life itself is on hold until a home loan closes. Don’t compound it by overloading borrowers with cumbersome amounts of paperwork. Besides all the required documentation that can’t be avoided, seriously consider vendors that offer paperless and mortgage documents eSolutions. Digital disclosure packages, eSign and eDelivery document services can make your employees more efficient, reduce turnover, save you money and reduce headaches. As more and more prospective borrowers are using electronic devices, keep your processes current with technology used by the upcoming generation. Find vendors who put emphasis on technology, implementation and customer service so you have an ally as you strive to provide a quality experience to your clients so nothing gets in the way of the excitement of that final signature.

Prep in advance for the predictable chaos.

To stay ahead of the curve, communication is key. Most people are unaware of how the mortgage process works, so communication and clear, specific direction is important. Help your clients be prepared ahead of time for what will take place. Make sure they have all the required paperwork (tax returns, bank statements, 401k statements, etc.) ready so it can be emailed upon request. Be knowledgeable of any useful apps your clients could use on their smartphone to turn paper documents into PDF’s if necessary. This is much more efficient than requiring your borrowers to carry around check stubs and loose papers that can be easily lost. Try to make yourself available as much as possible through email and text for quick questions. Make sure your employees are always professional and tech savvy enough to handle simple tasks like opening zipped files or downloading attachments.

Above all, don’t take your clients for granted. Make it a habit to go above and beyond. Creating customer value at every point of your mortgage loan process will create long term relationships which in turn will create long term success. Remember, you succeed by helping your clients succeed.