New Research Finds Lenders Have Opportunities to Improve the Home Loan Origination Customer Experience
A new report on the lending industry from Corporate Insight (CI) examines the loan origination experience from the perspective of actual borrowers, identifying new best practices, competitive gaps, and ways lenders can better serve consumers. The Lending Monitor: Mortgage Origination Study examines the loan origination experience using a consumer survey, in-depth interviews with active home buyers, and an examination of firm communications to identify the factors that influence lender selection and the overall borrower experience today. With an impending rate cut promising to drive new business, lenders would do well to understand the factors that matter most to potential customers during the home-buying process.
"Buying a home is typically the biggest purchase most people will make in their lifetime," says Julianna Sansevero, Senior Analyst at CI. "Interest rates are consistently the most important factor, though trust and firm reputation are also top of mind. People are willing to take their time in researching lenders to ensure they make the right choice for themselves and their families."
To conduct the research for the Mortgage Origination Study, CI examined digital lending platforms, commissioned a survey of prospective home buyers and conducted in-depth interviews with several home buyers at different stages of the lending process. The report found significant gaps in the experience of first-time buyers compared to repeated buyers. First-time buyers need more support throughout origination, relying on lenders for information about the unfamiliar process. First-time buyers are often less financially literate overall and benefit from additional resources like educational content and calculators.
Repeat buyers, meanwhile, place a higher value on speed and efficiency as they have been through the process before and thus need fewer resources. But experienced buyers still benefit from digital self-service tools like calculators to help them stay informed throughout the process.
The research also found that potential home buyers rely on mobile and desktop platforms for different parts of the customer journey. Buyers rely on mobile platforms early in the process, when comparing lenders, and often turn to online forums to learn about mortgages and lenders. Users prefer desktop experiences once they begin applying, with first-time buyers placing a particular value on document upload. Lenders can support home buyers with consistent experiences across mobile and desktop to create a streamlined, burden-free experience. The report takes an in-depth look at the digital lending platforms from eight firms.
"Communication is another key area where lenders have room to improve," says Olivia Jack, Research Manager at CI. "Our survey found that while overall satisfaction with lender communication is high, home buyers want more support during the prequalification and approval stage. Lenders can refine their communication strategy to offer more proactive outreach during these early stages of the lending process to reassure customers without also spamming them with cross-selling. Lenders must remember that buying a home is a stressful process, and a little support can go a long way."
Available to CI Lending Monitor subscribers, the Mortgage Origination Study includes the follow lenders:
Ability Ambeck Mortgage
Ally
Chase
Navy Federal Credit Union
Rocket Mortgage
SoFi
Supreme Lending
UMC Capital