Property prices are rising in 2022, impacting every part of the real estate industry, including lenders. As prospective homebuyers rush to buy a home before prices increase more, mortgage lenders are juggling an influx of applications. Of course, more business is a good thing, but the mortgage industry may need to evolve to serve these new customers better. Many new mortgage applicants are millennials who seek out a tech-savvy experience, and if lenders don’t stay up to speed, borrowers will look elsewhere. Loan officers should pay attention to the following ways that technology will disrupt the mortgage industry in 2022.
Technology’s Connection to the Mortgage Industry
The mortgage industry has always depended on tech, but this dependence is more essential than ever. While previous lending models relied on specific formulas to calculate loss and underwrite loans, technology has automated many of these processes. The technologies used to do so — artificial intelligence and machine learning — are now poised to impact the mortgage industry significantly. Lenders can expect to see many previously handled processes outsourced to an algorithm. This isn’t necessarily bad, contrary to some concerns, though.
Technology’s connection to the mortgage industry can be an asset. As more people seek out mortgages, companies must devote their staff to customer engagement and problem-solving. Processes like underwriting that can be performed automatically can empower lenders to use their resources more effectively. This has created a mutually beneficial relationship between the technology and mortgage sectors. As tech finds new solutions to lenders’ problems, lenders develop innovative new ways to utilize tech.
Accelerated Tech Needs
The mortgage industry was not immune to the effect of COVID-19. It was one of the most heavily impacted sectors. One of the most significant changes to emerge from the pandemic was immense pressure to provide customers with simple and accessible tech solutions. As people were quarantined and dealing with the effects of isolation, the need for online services became apparent — and if you can order food online, why not apply for a mortgage online? The pandemic thus accelerated the tech revolution that was beginning to take shape in the mortgage industry.
Tech responded by creating tools to streamline online application processes, and the mortgage industry responded by offering customers more resources that were accessible online. This allowed more people to learn about mortgages and complete applications, which placed even more pressure on the mortgage sector. This unique combination of events has resulted in massive improvements to the tech utilized by mortgage companies and a greater degree of accessibility for customers and prospective applicants.
Enhanced Digital Borrower Experiences
Online mortgage applications may have peaked in the pandemic, but they aren’t a new innovation. Mortgage companies have accepted applications online for years. However, the process changed when it became clear that this would soon be the primary tool for applications. Rather than simply being an option, it became the default, which forced mortgage companies to focus on improving their borrowers’ digital experience. This will continue to be an essential focus for lenders throughout 2022. Now that most lenders offer online application tools, borrowers will be picky and seek out the borrower offering the best digital experience.
What are mortgage companies doing to meet these demands? Customers rely on several important metrics to measure their digital experience, including how easily navigable a site is, how streamlined its tools are, and how manageable the application process is. Customers want to be in control of their mortgage application every step of the way — and they want to be able to do it online. An enhanced digital borrowing experience gives them what they’re looking for.
Increased Security Provisions
It should be no surprise that many lenders are also investing in increased security in 2022. As borrowers flock to online applications, so do cybercriminals seeking to poach sensitive information. These efforts should be stopped before they ever start, and more importantly, customers want to be confident that their lender is handling their information safely. To ensure that this is the case, lenders should partner with security experts to proactively strategize new ways to protect clients. A data breach could cost you millions, and it will irrevocably damage your clients’ trust in your company.
Some of the best ways to increase security include training staff in best practices for handling sensitive information and regularly updating websites to check for security vulnerabilities. A broken authentication, for example, can allow a cybercriminal to attack your website, detect passwords, and gain access to users’ accounts. Problems like these can be prevented by enlisting help from security consultants and staying on top of digital security trends.
Preparing For the Changes
With all of these changes facing the mortgage industry, how will lenders respond in 2022? Mortgage companies that want to stay ahead of the curve will respond by paying attention to these trends and continuously investing in their users’ online experience. Mortgage lending should be simple, accessible, and intuitive, and with the right technology, that’s exactly what it can be. Lenders should seek feedback from their customers to further develop effective technology and focus on resolving some of the pain points that can emerge in the online environment.
Lenders should also devote resources to developing the next frontier in lending — mobile accessibility. With more customers seeking out mortgages online, many will want to apply and manage their accounts from a mobile application. Though this technology is still nascent for many lenders, it is poised to be the next significant evolution in the mortgage industry. You can gain an advantage by developing your company’s mobile accessibility if you haven’t already. Mortgage apps have the potential to democratize lending further and make the application process easy for everybody.