These days, mortgage customers have high expectations. They desire a streamlined lending experience, start to finish.
According to a study done by McKinsey & Company,1 the following components of customer service are critical to winning over mortgage applicants’ business:
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- Speed – Customers want to work with lenders that offer fast prequalification.
- Transparency – Customers appreciate having access to their real-time application status.
- Accuracy – Customers prefer lenders that get things done right the first time.
With the right tools, you can offer speed, transparency, and accuracy with ease. Automation and digitization are two tools that can transform your prequalification process and upgrade your customer service.
In this article, we’ll discuss the value of offering prequalification and examine the push for digitization in the mortgage industry. We’ll also discuss how you can simplify your prequalification process using Cascade Prequal.
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The Value of Prequalification
Offering prequalification is a powerful way to funnel more potential customers into your sales pipeline. Prequalification can kickstart your relationship with aspiring homeowners, increasing your chances of winning over their business later on. Since most homebuyers choose their mortgage lenders within two to three weeks of starting their home searches1, the sooner you can forge a connection, the better.
Prequalification also gives you a chance to use lower-cost soft pull credit reports earlier in your sales cycle, safeguarding your applicants’ credit scores and enhancing their chances of successfully securing a loan.
Once an applicant has applied for prequalification with you, you can use your new relationship to your advantage, whether they meet your eligibility criteria or not. Here’s how:
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- If an applicant prequalifies with you, their prequalified status can help them stand out to sellers in an increasingly competitive housing market, expediting their journey through your sales pipeline.
Prequalified applicants may also be more likely to choose you as their mortgage lender when they’re ready to buy a home, due to your established and ongoing relationship. - If an applicant doesn’t qualify with you yet, you can use this opportunity to offer them support so they can meet your criteria in the near future. For example, you can educate applicants on ways to improve their credit scores. By offering this support, you can make a positive impression on these applicants and hopefully earn their long-term loyalty.
- If an applicant prequalifies with you, their prequalified status can help them stand out to sellers in an increasingly competitive housing market, expediting their journey through your sales pipeline.
The Push for Digitization in the Mortgage Industry
Digitization can enhance the efficiency of many key business workflows, including prequalification.
When it comes to prequalification, digitization can help you deliver exactly what mortgage customers claim they’re looking for: speed, transparency, and accuracy.
With that in mind, let’s take a look at four ways to digitize your prequalification process:
#1 Let Applicants Apply for Prequalification Online
Nowadays, 60% of customers prefer filling out their loan applications online.1 Applying for prequalification online is simply faster, easier, and more convenient.
To attract more prequalification applicants, make it easy for people to complete their prequalification applications on your website. You can enhance the application experience by offering progress meters and in-line validation. These features let your applicants track their application progress and fix submission errors on the spot.
You should also pay close attention to your website’s mobile experience. As of 2022, mobile devices drive over half of all global internet usage.2 To ensure you make a positive first impression on mobile applicants, test out your prequalification application on a mobile device to make sure it renders well on smaller screens.
#2 Offer an In-App Prequalification Application
With the rise of digital banking, mobile apps are an increasingly popular tool for financial institutions. You can streamline your mobile prequalification process by letting people apply directly within your app.
As an added bonus, your applicants will now have your mobile app installed on their phones, making their transition to becoming your customer in the future that much smoother.
#3 Enable Applicants to Link Their Financial Accounts
During a prequalification application, applicants usually self-report their income, employment, and assets. Since this information isn’t formally verified, the resulting prequalification offer may not be as accurate as it could be.
You can improve the accuracy of your prequalification decisions by allowing applicants to link directly to their financial accounts. Once their financial accounts are linked, you can retrieve verified financial information, as opposed to self-reported figures, allowing you to provide more accurate mortgage loan estimates.
Not only can this step enhance accuracy, but it can also speed up the prequalification process for your applicants.
#4 Provide Fast Prequalification Response Times
As we highlighted earlier, instant prequalification is one of the top three things customers desire most from mortgage lenders. With this in mind, it’s a good idea to do whatever you can to speed up your prequalification response times.
An easy way to offer instant prequalification is by automating the prequalification process. Cascade Prequal is a tool that can help you do just that.
How to Automate Your Prequalification Process With Cascade Prequal
Cascade Prequal is one of the many mortgage lending automation solutions we offer here at Certified Credit. Cascade Prequal can simplify the prequalification process for both you and your potential customers.
With Cascade Prequal, you simply select the specific credit reports you want to use for your prequalification soft pulls, whether you prefer lower-cost single bureau reports or comprehensive tri-merge credit reports. After that, you can set your credit thresholds and let Cascade Prequal take care of the rest.
With its powerful automation and easy integration, Cascade Prequal enables you to:
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- Offer an online prequalification application process – Cascade Prequal allows you to offer prequalification directly on your customer-facing website. You can recieve notifications for all of your applicants’ prequalification submissions and access to provided data and potential loan products.
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- Ensure proper permissioning and compliance – Cascade Prequal also streamlines your compliance. It automatically generates the necessary disclosures and ensures that consumer permission is captured.
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- Qualify applicants quickly – Automation can speed up your prequalification response times significantly, satisfying your potential customers’ desires for swift decisions.
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- Reduce the cost of your prequalification process – Cascade Prequal can lower your prequalification costs by saving you time. It can also lower costs by reducing your reliance on expensive hard credit inquiries for applicants who are unlikely to qualify for formal approval.
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- Protect borrowers’ credit scores from unnecessary hard inquiries – Limiting hard inquiries doesn’t only save you money—it also protects your potential customers from incurring unnecessary reductions to their credit scores. More potential customers may be willing to apply with you early on in their home search if they know their credit score will remain unscathed.
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- Enhance your prequalification accuracy – Another perk of automation is that it eliminates the potential of human error on your end. In turn, you can rest assured that your prequalification offers are as accurate as possible.
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- Keep the competition conveniently in the dark – When mortgage applicants incur hard inquiries on their credit reports, other lenders can receive alerts. If your competitors receive these alerts, they may try to swoop in and steal your applicants’ business away from you. You can avoid alerting the competition of a potential customer by encouraging applicants to apply for a more stealthy prequalification instead.
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- Capitalize on opportunities to cultivate customer loyalty – Prequalification helps you to build relationships with borrowers early on in their home buying process. If you use this time wisely, you can establish trust and rapport with prequalification applicants and increase your chances of securing their business when they’re ready to buy a home.
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- Help your customers receive the very best rate – In addition to outstanding customer service, mortgage applicants want to receive the best rate possible. After all, even a quarter-point difference in their mortgage rate can translate to thousands of dollars over the life of their loan.
You can offer eager applicants better rates by helping them achieve higher credit scores before they formally apply with you. All you have to do is construct customized action plans to increase their credit scores based on their prequalification data.
If this sounds complicated and time-consuming, don’t worry. We offer many helpful credit score improvement tools at Certified Credit. Through our partnership with ScoreNavigator, you can enjoy access to:
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- Personalized credit analyses – After analyzing your applicants’ credit reports, ScoreNavigator can identify what action steps will produce the most efficient score improvements.
- Powerful simulations – Using its innovative simulators, ScoreNavigator can determine how to raise applicants’ credit scores to a target number and let you know the best day to pull their credit reports to ensure their improvements are reflected in their credit scores.
- Proprietary Point Deduction Technology® – ScoreNavigator can showcase how many points your applicants are losing per account, enabling them to focus on the ones that offer the greatest opportunity for improvement.
- Personalized credit analyses – After analyzing your applicants’ credit reports, ScoreNavigator can identify what action steps will produce the most efficient score improvements.
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Certified Credit: Simplify Your Prequalification Process Today
As you can see, digitizing the prequalification process can help you attract more applicants, initiate valuable relationships with them, and strengthen the quality of your sales pipeline.
In addition to Cascade Prequal, we offer other game-changing automation solutions here at Certified Credit, including Cascade VOE (an automated verification of income and employment tool) and Cascade Alerts (a helpful lead generation tool).
We also provide a variety of affordable credit reports, such as:
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- Prequalification Soft Pull Reports
- Tri-Merge Credit Reports
- Smart Select Reports
- Refresh Credit Reports
- Mortgage Comparison Reports
- Business Credit Reports
Are you ready to upgrade your mortgage lending business? Discover how partnering with Certified Credit can take your business to the next level today
Sources:
1 McKinsey & Company. Competing on customer experience in US mortgage.
2 Broadband Search. Mobile Vs. Desktop Internet Usage (Latest 2022 Data).
https://www.broadbandsearch.net/blog/mobile-desktop-internet-usage-statistics
