As the Mortgage Process Speeds Up, Satisfaction Levels Fail to Keep Pace
The process of applying for and being approved for a mortgage is usually a lengthy engagement that can often leave the borrower feeling frustrated. But, over the last few years, the mortgage industry has steadily embraced upgrades in digital technology that have been designed to make the approval process easier and quicker.
One would think that customer satisfaction would improve, but according to the 2017 U.S. Primary Mortgage Origination Satisfaction Study released by J.D. Power, the exact opposite is happening. Find out why in this article, and how your mortgage business may be in a position to take advantage.
Online Applications Rise But Customer Satisfaction Drops in 2017
J.D. Power’s study revealed that 43% of all borrowers applied for their mortgages online in 2017, which is up from 28% the year before. However, customers who applied online wound up being less satisfied than those who applied in-person this year.
Overall, customer satisfaction among primary mortgage originators dropped by 8 points in 2017. This is based on a decline of 18 points in customer satisfaction among online applicants, with in-person applicants enjoying their experience by 10 points higher.
The increase in online applicants shows that borrowers are attracted to the convenience of submitting their loan and refinance applications online, and the thought of having their loans processed quicker than those applying in-person was an added attraction. But, the speed that was anticipated fell very short of expectations.
In fact, at an average of 36 days, online mortgage applications took nearly a week longer to process than in-person applications.
What Factors Were Used in the Study’s Research?
J.D. Power used six key factors to determine mortgage satisfaction levels. These include:
- Types of loans offered
- Application and approval process
- Customer interaction with loan originator
- Closing process
- Onboarding
- Problem resolution
The study also concentrated on critical drivers of satisfaction among borrowers in numerous key segments of the market, such as:
- Refinances vs. New Home Purchases
- First-time homebuyers vs. repeat purchasers
- Borrowers using specialty programs like FHA, VA, etc.
- A variety of different demographic segments
What Does This Mean for the Future of the Mortgage Industry?
As convenient as applying for a mortgage online can be, this is one of those processes in which human touch seems to make all the difference. Borrowers want to feel as though they are important to their mortgage company. It is equally important for borrowers to have a single representative guiding them through the process.
After all, buying a home is a major event in just about any borrower’s life, so they need to have trust with their lender. That level of trust can only be achieved through one-on-one interactions with their loan representative.
That said, there is still a market for those who wish to deal with their lenders electronically, so don’t expect to drop the digital application altogether from your mortgage business’s online presence. Eventually, the technology will improve to the point that it will deliver faster and more efficient approvals, but at the moment, face-to-face interactions are still going to be your bread and butter.
If you’re stuck between digital and face-to-face mortgage application processes in your firm, you could probably use a little kick to rev up your profit generating machine. When you’re ready to increase your revenue, why not try buying high quality mortgage leads to augment your sales team’s efforts? RGR is here to help.
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