The relationship between consumers and their residential mortgage lender should be no different than the experience they share with their trusted primary physician.
They rely on them to examine and diagnose their health. They feel properly educated, and comforted, when their prognosis and course of treatment is explained in terms that they can understand. And, through proactive communication when they are due for a check-up, they expect nothing but clear and concise direction and information on the next action to take. Because they have the power of choice, should their doctor or anyone in the office miss the mark, a change in care is imminent.
The same can be said for banking and lending. The experience is most important to today’s borrowers. Yes, they care about the interest rate, differences in mortgage products and sifting through the loan terms, costs and related fees. But we’ve all heard about the doctor who had poor bedside manner and left a patient with more questions than answers after a brief meeting in their office or a curt phone call (should they get them live, that is). Relationships can quickly end.
Consumers have choices; they can and should make a change if the experience is not working for them.
So, how can mortgage lenders build lifelong connections with today’s borrowers? The answer is by combining digital capabilities that support their journey with a human-centric relationship approach. It’s no secret that the mortgage finance process can be an overwhelming experience for consumers. The emotions and stress related to what is likely the largest purchase of their life needs to be handled with the utmost care. The easier the process and the more comfortable you can make the buyer will lead to greater satisfaction and a higher likelihood they will consider you in the future – and then refer their friends and family.
Streamline the Loan Cycle
Speed to fulfill and close loans that are in process happens because an easy plan of action is followed. The industry has dramatically evolved in recent years in simplifying the process for buyers at the point of sale. Whether it be offering customized rate quotes, providing and enabling online applications, administering customer loan portals for uploading documentation, as well as additional mobile capabilities, it’s important that you meet your customers where they are.
Lending technology innovation is going to be a differentiator even more throughout the loan cycle in an effort to gain efficiency, capacity, reduce customer headaches and provide a seamless experience. But it’s still up to you to remove the friction and be their trusted partner in helping them through every step in the mortgage process. That’s what your customers will remember most.
As the mortgage business normalizes with loan volumes decreasing as industry forecasts suggest, costs will become a larger factor, as you may be anticipating. Speed, costs and loan volume all have common values. The quicker the turnaround time, the greater the loan volume capacity and the more profitable mortgage banking becomes.
For the consumer, the faster they get through the process, the stronger their purchase offer becomes and the less expensive their interest rate lock is. Educating and reassuring your customer throughout the process will not just help them get possibly more favorable terms, but it will also be more economically beneficial for you and your organization.
Communicate, Communicate, Communicate
It’s important to remember that your mortgage customers, many of whom are first-time buyers, are relying on and trusting you throughout this journey. Simple check-ins to inform customers on what to expect going forward and key dates to keep in mind show them that this is more than a transaction. Just as brick-and-mortar bank branches still hold relevancy even as savvy consumers tap into digital self-serving resources, it will be essential for mortgage lenders to maintain a personal touch.
Guiding buyers through the mortgage journey will not only help move the process along, but this is where you will gain trust and show value. Organizations that leverage technology more effectively, combined with a human-centric relationship approach, will be more successful in forming relationships with new buyers, retaining customers and competing against emerging fintechs.
Next time you meet a prospective buyer, remember how you want them to view you: as the physician who will expertly diagnose what’s best for their financial health. Every buyer is different. Take the time to get to know their unique situation, prescribe what’s best, advocate for them and anticipate their needs and questions. Just like your physician should do for you.
David Cedrone is senior vice president and head of consumer & small business lending at Cambridge Savings Bank