Mortgage lenders have an important balancing act – they must attract the ‘right’ clientele, who are at the core of the business, while managing risk by making informed lending decisions.
Data is an essential component to decision-making in mortgage lending as this is how lenders decide what clients pose an acceptable risk. But gathering data has another role to play. The quicker lenders can compile relevant data, the more streamlined the mortgage application process which leads to happy clients and an elevated reputation for the business.
The Flaws of Traditional Data Collection
Mortgage lenders compile data about potential borrowers and the real estate market. Compiling this information manually is a frustrating and time-consuming process. In addition to the delay of the data coming in, the mortgage agent must conduct several layers of analysis which can lead to inaccuracies as market information may be out of date or the agent may miscalculate or misinterpret a key statistic.
Benefits of Real-Time Data Delivery
Modern methods of data collection are a significant (and welcomed!) improvement. Not only is information available electronically, but organizations like DataTree offer real-time delivery of key real estate property metrics so lenders can save time on compiling and reviewing information and reduce potential errors due to automated receipt of information.
As a result, lenders can make decisions faster based on reliable data. This benefits potential borrowers as they have a shorter wait on financing approval and terms. Lenders can finalize contracts with less lag time and start earning money on their investments immediately.
Improving Customer Experience
Mortgage borrowers have many potential options for financing and it is typical for them to shop around to find the best rate or terms before making a home purchase. Even those who are a higher credit risk have many businesses who will lend them money. So, in addition to the terms of the contract, the interaction with the mortgage lending company is a key factor for potential borrowers to decide where to obtain financing. Anything that makes the borrowing application easier and more streamlined, improves the chances of the lender closing the deal before the applicants change their minds.
There's real data supporting this point. According to a J.D. Power Primary Mortgage Servicer Satisfaction Study , when customers are unsatisfied with their mortgage providers, 63 percent would switch just to get better service. And, when satisfaction is high, 66 percent would stay with their provider instead of refinance. Lenders should think of the initial application process as an essential first step with a potential long-term customer. Expedient data collection is an essential piece of the lending toolkit to make that happen.
Accessibility of Systemic Information
Current mortgage data isn't just important in the application process. This information helps lenders to create reports on industry trends that help them to continually evaluate risk. Real-time analytics are key components of models that individual agents rely upon to decide what borrowers to finance. These analytics also help lenders make accurate predictions about the evolution of the market to help avoid unsound lending practices that spell disaster for the company and borrowers alike.
Excellence in the Decision-Making Process
Real-time data is at the heart of successful mortgage lending practices. Business leaders rely on up-to-date information to develop and revise risk models. Individual agents use those models to assess the risk potential of new borrowing scenarios. In specific financing applications, real-time data ensures accuracy and expedience and clients know quickly whether they are approved. These factors can elevate the overall customer experience and help lenders keep clients happy. And, client satisfaction is a key indicator of customer retention over the life of the mortgage.
Getting the Right Information Quickly
Mortgage lenders need real-time real estate and market trend data to gain new business and stay competitive. DataTree has all lenders need to know about the real estate market to help with the lending process, develop predictive models and build a robust customer service strategy. To find out more, get a free trial of DataTree today.