Rethinking Mortgage Travel

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Using digital processes based on real estate data to improve results for both lenders and borrowers.

Digitization has already affected almost every aspect of our lives – from the way we work and communicate to shopping and banking. Therefore, it should come as no surprise that consumers expect a similar online experience when embarking on their home buying journey.

However, this presents a major challenge for lenders: how to digitize their legacy platforms and processes to meet rapidly changing customer expectations. This problem is compounded for lenders, whose organizations have already digitized many elements of their personal banking services. This can lead to a mismatch in the customer experience, depending on what products they do.

“Large financial institutions can struggle to piece together all the data they need to truly understand their customers,” said Milena Malev, general manager of financial services and insurance, CoreLogic Asia Pacific. “On top of that, many do not use the property information and other data available to them as effectively as they could to support their clients’ home buying journey.”

As a result, some lenders still take weeks to collect and verify the documentation required to approve a loan. And the larger the organization, the more difficult it can be to optimize processes to keep up with customer demand and regulatory requirements.

“For example, we are currently seeing a significant increase in refinancing volumes throughout the market,” said Milena. “Coping with this volume is a fundamental challenge for large lenders as their legacy systems can limit their ability to easily consume the data they need. What’s more, 60% or more of mortgage loans come from brokers, so lenders are looking to meet brokers’ expectations so that they can keep their business while keeping up with the changing needs of consumers. ”[1]

Despite these hurdles, some banks are investing heavily in opportunities that can provide their customers with an end-to-end digital home buying experience. We will look at the three key stages of the mortgage process and the role that real estate data and digital solutions can play at each stage.

Stage 1. Engaging the client in the digital world

Lenders with access to detailed customer and property data can be a reliable partner in the home buying process of each borrower. Understanding clients’ property needs and the driving forces behind their financial decisions can lead to a deeper discussion of what really matters to them.

“By providing the client with detailed property information tailored to their specific needs and the stage at which they are looking for a home, the lender can help them find a suitable home and loan,” said Milena. “It’s about building personal relationships.”

Stronger customer relationships can help homebuyers partner with their bank right from the start and seek advice when exploring their property and financing options. The fully digital mortgage process also allows lenders to pre-define client expectations.

“By using quality information about real estate, lenders can have more meaningful conversations with each client about their property needs, including how much they need to save and where they want to buy,” Milena said. “Accompanying a client through a home search helps position the lender as a real estate expert and not just a financial service provider, which can have tremendous benefits for their business.”

Phase 2: Data-Driven Application Process

Access to comprehensive property data can also help customers make more informed decisions about their purchases. What’s more, providing a 360-degree view of individual properties helps to personalize the experience for each client.

“We are using a range of predictive modeling techniques, including machine learning, to identify key property attributes, and we now have coverage of those attributes for most Australian properties,” Milena said. “We have developed and refined this capability over the years, which has greatly contributed to increasing the depth and breadth of our data.”

One of the most frustrating aspects of applying for a loan can be the amount of time-consuming paperwork. But with the help of digitized forms, pre-filled with key information about the client’s financial situation and supplemented with data on the property of his choice, which the client can simply confirm, this administrative burden can be significantly reduced. For example, automated lease pricing (AVM) models can automatically estimate lease amounts and support serviceability calculations, so lenders may not need to request lease agreements.

“Historically, the lender collected all information about the property and the individual, and then carried out an assessment,” said Milena. “Now you can move these considerations from the back end to the front end so that clients know about a property decision in minutes, rather than days. As open banking continues to evolve, it will become even easier to combine property data with borrower credit information, further simplifying the process. ”

For example, CoreLogic has access to comprehensive property data and valuation of over 10 million properties across Australia for over 40 years. Through our digital mortgage solutions, this data can help lenders make timely decisions for clients on their loan applications, giving buyers greater speed and confidence in real estate transactions.

Disseminating property data in the early stages of borrowing can also help lenders identify any property exceptions or potential property characteristics that might affect the amount they are willing to lend or the property they are willing to pre-qualify. It can also eliminate the client’s uncertainty in the process. Key characteristics may include property misuse, property security issues, properties in high-density areas, or known natural hazards, depending on the lender’s risk appetite.

Effective risk management is an important part of the home buying process for both lenders and borrowers. Leveraging complex real estate data and the valuation ecosystem can not only simplify the valuation process and maximize digital valuation; it can also help determine the correct type of risk assessment, while eliminating manual processes and human error. This can lead to significant time and cost savings without increasing the risk curve.

Milena commented: “Since the advent of digital appraisals about 15 years ago, they have continued to evolve, improving the use of real estate data, platforms and virtual appraisal tools. We are now seeing the adoption of digital assessments in banking and finance from 30% to 80%, depending on the digital capabilities of the lender and his risk appetite. “

Stage 3. Continuous interaction

The all-digital data-driven mortgage process does not end with the disbursement of the loan. It can also provide lenders with the tools and information they need to support a client throughout the lifecycle of a home ownership.

“It’s all about keeping in touch with the client,” said Milena. “For example, a dynamic equity calculation can help clients keep abreast of the value of their assets and how much capital they have created, based on a dynamic estimate of what their property is currently worth. By gaining a range of data about a client and their property – whether they are listing properties for sale or rent, for example – lenders can strengthen relationships over the long term by helping a client prepare and secure financing for their next property. purchase.”

By being able to track the various stages of a property’s lifecycle, lenders can even play an active role in helping clients make confident financial decisions at every stage of their home acquisition journey. Lenders who can automate this process with their existing home loan portfolio have a real opportunity to forge closer ties with their clients and systematically reduce refinancing outflows.

“If a client wants to renovate, buy an investment property, or top up a loan, the lender may have the tools to better understand the value of the property, the client’s financial situation and his ability to pay back in advance,” said Milena. “The process can then be completely automatic, so many of these solutions are simplified to the point that they don’t take any time at all.”

CoreLogic’s digital mortgage solutions are one example of how sophisticated analytics, platforms and digital tools can improve the quality of service for both future and existing homeowners and lenders, accelerating appraisals and approvals by leveraging best-in-class real estate data.


[1] “The share of the brokerage market exceeds 60%”, Advisor, November 2020

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