Digitization has become crucial across various industries, including mortgage or real estate. However, there is slow adoption of digital technology in the mortgage industry, with very few consumers satisfied with traditional closings. Over the years, the mortgage industry has experienced a wave of technological innovations as lenders seek automated and simplified means to accelerate each step of the mortgage origination process.
Traditional mortgage closings involve a stack of paperwork, including the promissory note, the loan application, numerous regulatory documents, the mortgage documents, and finally, the settlement sheet. Besides the blizzard of printed paperwork and the need to sign by hand, traditional mortgage closings require the involved parties to meet physically. Here are the top benefits of digital mortgage closings or e-closings.
1. Higher employee satisfaction
Digital mortgage closings involve a lot of automated processes. That means employees have extra time to focus and perform more strategic activities, which benefit the company. Since the digitization of mortgage closings minimized employees’ workload, they become more enthusiastic and no longer feel that their work is taxing. You will surely get the best results working with happy and satisfied employees.
Digital mortgage closings are also simpler since they involve a single process for all closing types. Your staff does not need to master multiple techniques, making the process easier. However, you need to evaluate your tool to take advantage of the simple nature of digital mortgage closings. Ensure it can close all loan types uniformly, including hybrid, wet, and full eClose.
2. Reduced error rate
Human error is more likely to occur whenever paperwork is involved. Be it spelling errors or having to revisit the closing table due to missing signatures. Not only is this inconvenient, but it is also time-consuming, especially if the involved parties live in different states. Accuracy is a significant element in customer experience and satisfaction. No client or customer appreciates redoing closings due to silly mistakes, which could be costly in the long run.
Most of the processes in digital mortgage closings are automated, translating to reduced human error. Because digital closings are also faster, lenders can close the first time accurately, and consumers don’t have to wait for ages. Accuracy and speed result in customer satisfaction and improved efficiency of the closing process.
3. Convenient and less dwell time
Digital closings or e-closings handle much of the paperwork through a secure online portal using software that all participants can use. It, therefore, eliminates the need for participants to meet physically. The main advantage of a digital closing is that it can be done anywhere, regardless of the participants’ locations—no need to reschedule your pants or lose half or a whole day from work.
Traditional mortgage closings require participants to meet in person; this can be inconvenient, especially if you have to travel to a different state or country.
The digitized form of mortgage closings is also efficient since lenders can quickly access capital to offer more loans. Using digital mortgage closings significantly improves the loan dwell time of lenders. Besides helping lenders originate more loans, the business is more profitable when it is easier to close and sell.
4. Increased net promoter score (NPS)
One of the most valuable metrics a brand can command is the net promoter score. It gives you a simple way to learn customer sentiments concerning your competitors. A higher score makes it more likely for your borrower to become an advocate or referral source. Having customers that advocate for your business or refer you to other clients is one of the top ways to attract borrowers.
5. Overall operational efficiency
The introduction of digital closing technology has enabled lenders to enjoy several operational gains. The entire process is efficient and cost-effective for both the lender and the customer. Because of improved customer experience and employee satisfaction, more clients are likely to resort to digital closings. The employees’ enthusiasm, zeal, and motivation translate to better outcomes, including large profits. Most lenders have noted decreased loan production costs as a significant benefit of digital mortgage closings.
A seamless or frictional experience is crucial to the success of any business. The modern consumer values speed and convenience, two critical variables enabled by digital mortgage closings. Using a digitally-enhanced mortgage closing is an easy way to woo and retain customers due to its ease compared to the cumbersome traditional closing systems.