Financing the purchase of a home is a big deal. For most consumers, the home is at once both their biggest purchase and investment. While there are consumers who will choose a lender solely on rate and closing costs, many will seek out a relationship-based lender to usher them through the process. For many individuals, particularly small business or existing real estate owners, the mortgage application process is anything but routine. It’s a complex process, aided certainly by the increased efficiency and safeguards contained in new regulations, but also requiring advice and help from a professional.
Given the dynamic nature of the mortgage loan process and its myriad variables – fluctuating rates, third-party participants, closing logistics – it’s inconceivable that the need for human interaction at various points throughout the loan process will ever be eliminated.
For example, in the event a borrower runs into an obstacle – such as being self-employed and asked to provide additional documentation verifying income – a loan officer is able to provide critical assistance in determining the information necessary to address the question and keep the loan application moving forward.
These interactions open the door for innovation in the process. Lenders can distinguish themselves by the type of service and support they offer to customers. Savvy institutions emphasize the customer relationship as a competitive advantage and key differentiator. By focusing on the customer’s broader needs and long-term objectives as opposed to simply the mortgage transaction, they are able to drive meaningful value.
In this new era of lending, the challenge will be to find the right balance between a streamlined system and customer service that isn’t a margin killer.
Though the philosophy of “we’ll work with you” needs to be redefined according to regulatory and cost considerations, it’s critical to the process. While the mortgage loan is becoming a commodity, the customer service related to it should not be, especially for smaller institutions hoping to maintain a stake in the mortgage industry.