The old ways of doing business are a part of history, being drastically changed in favor of an on-demand economy. Automotive, hospitality, healthcare, finance, staffing, almost anything, really—today, you can have it at the swipe of a finger.
Thanks to advancing technology and consumers pushing for a better experience, building a mortgage app is becoming the new lending norm as well.
Millennials — the largest adult population group in the U.S. — are starting to enter the housing market and spurring industry changes. As the National Association of Realtors reports, millennials made up the largest share of homebuyers in the past year (38%), being most likely to find online offerings during their home search. Younger millennials (22 to 29 years) and older millennials (30 to 39 years), 86% and 52% respectively, were first-time home buyers, more so than other age groups.
Once millennials have decided, they want the result right now, deeming unacceptable anything later than overnight delivery. In response, fintech companies should offer easy and sometimes one-button applications. In this article, we will uncover six takeaways that bear a crucial message: adapt today or risk disruption tomorrow. There are no shortcuts, trust us. We know all actionable tips on creating a custom loan origination software, as we have already done it.
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As it goes in the Accenture report, lenders who prefer traditional banking to mobile banking risk losing up to 35% of the market share to online service providers. Meanwhile, Energias Market Research projects the global lending software market to reach the 11.6% annual growth mark till 2024. The industry as a whole is to surpass $5.5 billion in revenue.
The bulk of the niche’s value goes to digital mortgage software, residential mortgage loans, and the U.S. Being one of the world’s largest, the U.S. mortgage industry is experiencing historically low mortgage rates. Such a drop makes real estate a tidbit to mortgage applicants: many Americans became homeowners despite the pandemic in 2020, resulting in the third quarter’s 67.4% homeownership rate.
To build a mortgage LOS platform that users will fall in love with, you should consider its fundamental feature set. Let’s take a look at some basic features that help you digitalize mortgage business.
We’ve covered the common options, but there may be more, depending on a mortgage app’s specifics. Now, let’s take a closer look at the benefits mortgage automation software development can offer the mortgage industry leaders.
Before building a mortgage app, you should decide on a suitable method and sum up its pros and cons. After all, if well-chosen, all of these pieces result in greater efficiency and a shorter loan cycle, saving time and money on business processes.
As you can see, mortgage automation software development offers multiple benefits. But the options prevailing on the market these days — ready-made apps — are more limited than custom software solutions, take custom real estate management software as another example.
To develop a mortgage app that covers all user groups, you should clearly define features depending on who uses it. Hence, every online mortgage platform should ensure both lenders’ and customers’ high-quality experience.
From lenders’ perspective, an app should:
To streamline document management, the mortgage LOS platform should utilize automated digital recognition (ADR) and optical character recognition (OCR) to distinguish and read texts, as well as catch errors.
Mortgage app development should boost productivity by relying on the power of automation with minimum to zero errors in the process.
Most home-buyers experience stress when obtaining a mortgage, so financial technology should substantially ease the level of anxiety.
From consumers’ perspective, a mortgage app should ensure
Mortgage automation software development should ease loan processing by taking consumers through a clear and logical process and allowing them to apply for a loan over their preferred iOS and Android devices.
Mortgage app development services should be applied to create a one-stop portal with a possibility to upload files, sign documents, and track mortgage progress in real time.
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Before developing a lending business management system, your team should be aware of some fundamental market issues. Let’s explore the basic necessities.
Finding out as much as you can about your target audience is the very first thing you need to consider when developing a lending business management system. An in-depth understanding of your end-users’ needs and pain points makes building a mortgage app easier and results in a better final product.
Mortgage compliance is one of the top concerns of banks these days.
Consumer Financial Protection Bureau (CFPB), Office of the Comptroller of the Currency (OCC), Federal Reserve System (FRB), National Credit Union Administration (NCUA), the Home Mortgage Disclosure Act (HMDA), the Equal Credit Opportunity Act (ECOA), and other regulators have initiated requirements for lending and servicing to ensure customer and investor protection. To digitalize mortgage business, you should comply with local laws, policies, and regulations.
How a mortgage lender delivers on user experience tends to prevail over what it delivers. According to the White House Office of Consumer Affairs’s survey, 80% of American consumers will pay more for a better experience.
Now that you’ve disclosed end-users’ needs, you can uncover what they are willing to pay for. Lenders typically make money from commission on the loan price, charging lender fees, commission on the monthly mortgage payment, and selling loans to end-investors.
For instance, intermediary mortgage firms engaged in peer-to-peer software solutions earn from home-buyers’ fixed payments or by taking a small fee from both the borrower and the lender based on the total loan amount.
The entire mortgage service success depends on the software vendor you are going to partner with. First, they will conduct business analysis, write a technical specification, estimate software development cost, then plan the project as a whole. Second, you both should clarify a mortgage app development workflow, define the feature set, and design an application concept. After setting up project milestones, the development team will start building the minimum viable product (MVP).
Building a mortgage app is a challenging task, therefore, it would be best if you roll out an MVP first to test software and business performance. After gathering feedback, you can improve your service before its public release. Here’s how we did it at Relevant.
Relevant is a software development company that helped FirstHomeCoach build a custom mortgage app to provide its customers with a seamless end-to-end home buying journey. We delivered software that assists borrowers in creating a personalized plan, analyzing costs, and tracking every stage of the property buying process.
A purchase plan helps consumers buy a desired property in a particular timeframe and alerts on how much they should save each month.
The calculator unlocks the maximum loan amount, interest rate, and EMI based on the borrower’s salary, other income, and location.
Deposit builder provides users with calculations on savings to fund their deposits and get a property sooner.
A mortgage app integrates with third-party facilities like banks, real estate companies, credit reporting agencies, and open banking solutions to ensure an easy and fast buying process..
Technologies we used:
Mortgage app development services are on the rise. An increasing number of loan firms evolve by using advanced software solutions and running world-class operations. If you’re (still) pondering whether it’s a good choice to build a custom solution to digitize the mortgage business, you better start moving. Now.
We at Relevant provide one of the mortgage industry’s best digital solutions. Don’t hesitate to contact us. We have all services at our disposal to craft a custom mortgage LOS platform that will meet your particular business needs.