Buying a home is a significant life event. The digital mortgage process can help alleviate the stress by streamlining the entire process.
Here, we discuss how the digital mortgage process works and how it can benefit you. We also highlight recent trends and sample digital mortgage programs.
“Digital mortgages” and how they work: streamlining the process from application to closing
A digital mortgage is a technology-based product offered by lenders. It allows borrowers to experience the mortgage process online from start to finish:
- Digital loan application: You can fill out the application through an app on your smartphone or tablet, or on your desktop or laptop. Within minutes, you receive a pre-approval decision.
- Digital disclosure signing: From your mobile device or computer, you can read and e-sign the loan estimate, necessary federal and state forms, and other disclosures.
- Digital documentation gathering: Saving time, paper, and printer ink, you can use a secure, online portal to upload documents such as paystubs, W-2s, and bank statements. Some lenders may even be able to save you this step if they can access your information through your employer’s platform and your bank’s platform.
- Digital communications: Throughout the process, you receive notifications by email or text regarding outstanding items, remaining milestones, and pending deadlines. You can also use an app to check the status of your loan in real time.
- Digital appraisal process: Under Fannie Mae and Freddie Mac guidelines, you may qualify for a property inspection waiver (PIW) or automated collateral evaluation (ACE). In essence, this means you get a virtual appraisal instead of paying and waiting days for an appraiser to come to the property and complete an appraisal report. That could be a savings of time as well as hundreds of dollars ($250 to $550, depending on the size of the home and other factors).
- Digital closing process: You can review and e-sign the closing disclosure. Although you will usually still have to show up in person to sign the final loan documents in person in front of a notary, some states allow a 100% digital closing process. For example, some title companies offer electronic notarizations through webcam.
Benefits of digital mortgages: speed, simplicity, and convenience
According to Ellie Mae’s 2019 Borrower Insights Survey, here are the top reasons why borrowers like the digital mortgage process:
- Quicker time to close
- Simpler process with less paperwork
- Information more available
- Greater flexibility of time and pace
- Enhanced security
- Reduced data entry
- No need to meet in person
Recent trends with digital mortgages: human touch is still important
- According to the Ellie Mae survey, borrower demand for digital mortgages has increased 18% in the last two years.
- However, human touch is still important. According to recent surveys conducted by Ellie Mae and Fannie Mae, borrowers still want personal interaction, especially for the more complex or critical steps, such as understanding mortgage terms and options, and review final loan documents.
- Across the generations, in-person communication with the lender or mortgage broker is still vital. According to Ellie Mae, 79% of millennials, 78% of generation X-ers, and 61% of baby boomers reported frequently meeting in person with their lenders or mortgage brokers.
Sample digital mortgage programs: close in just 15 business days
Using the digital mortgage process, we are offering a program that guarantees we will have your loan clear to close within 15 business days from submission of a complete loan application package.
According to Ellie Mae, the average time to close for all loans is 45 days. Our 15-business-day program chops that average time by more than half.
The program applies to a wide range of programs, including the high-balance program, which covers loan amounts from $484,351 to $726,525. While a traditional bank would consider this a non-conforming jumbo loan (hence requiring more paperwork and time to approve), we have access to lenders that use an automated underwriting process that only takes a matter of days.
To learn more about our 15-business-day program, please click here.
Digital mortgages give homebuyers a mortgage experience that is speedy, convenient, and secure. The experience is enhanced even further through personal interaction with the lender or mortgage broker. We have both the technology and the expertise to help you get approved for a home mortgage loan. Contact us today to learn more about your digital mortgage options.
David A. Krebs is a licensed mortgage broker offering commercial and residential loan programs beyond your regular bank. Call us at 321-239-2781, click here to submit a message, or click here to book a free consultation.