As the United States economy recovers from the severe downturn it suffered during the coronavirus pandemic, mortgage lenders are expecting to see increased demand for new applications as well as some refinancing activity. Existing-home sales will likely pick up along with new construction, and mortgage borrowers who did not qualify for refinancing in 2020 will try again in 2021 before the prospect of rising interest rates gets stronger.
Higher demand for mortgage loans should not be a problem for established lenders who are using the right technology solutions. When it comes to originating, processing, closing, and servicing mortgage loans, the technology tools available today are sufficient, but new and innovative solutions are emerging on an almost daily basis.
Marketing to Millennial Borrowers
Providing a link to an online mortgage application that appears on a bank login page used to be sufficient marketing for established financial institutions, but this is no longer the case. Members of the Millennial Generation are known to be somewhat averse to traditional banking operations; this is why you see many of them flocking to alternatives such as PayPal and Mint.
Short of forging partnerships with those alternative providers of financial services, banks should review their internal operations and emulate certain aspects of the non-banking experience. User interfaces, workflows and communications are important in this regard. A bank that is still using PDF files for their 1003 applications is behind the competitive curve because others are using mobile apps instead.
What we will likely see in 2021 with regard to mortgage marketing is an overhaul of digital communications. Older loan applicants have no problems with using email to get in touch with their lenders, but younger applicants prefer instant messaging apps. Borrowers should be able to reach banks via social networks if that is their preference. Data security is certainly a concern, but some banks have gotten over this hurdle by providing secure mobile app platforms for handling sensitive documents and messaging.
Banks do not have to develop proprietary platforms for their mortgage origination apps. Developers such as BNTouch provide efficient frameworks that offer top-level compliance and data security; banks can configure the MortgageCircles app to reflect their own branding and connect with customer relationship (CRM) systems. This loan origination app is already used by brokers who work with real estate professionals in the field, and it features a friendly user interface that resonates with younger borrowers who prefer smartphone communications.
With millennial borrowers, mortgage lenders must assume that they are glued to their cell phones, and this is why there needs to be an emphasis on mobile communications. Automated transaction updates from processors and requests for additional documents should all be handled at the smartphone level. Saddling borrowers with old-fashioned requirements such as insisting that they use fax machines will only turn off younger applicants. Mortgage lenders should not underestimate the power of mobile platforms when it comes to reaching millennial customers; in many cases, this is the only branding aspect that is important to young borrowers.