Obtaining a mortgage can be a lengthy and confusing process, even for experienced homebuyers. First-time homebuyers typically face a much higher learning curve as they navigate learning to understand their credit profile, the homebuying process and the many terms and regulations surrounding the housing industry.
For example, when it comes to closing costs, or fees borrowers have to pay when they close on their home, some line items include title fees, pre-paids and escrow, mortgage insurance, lender fees and property-related fees. These fees vary depending on the price of the home, and who agreed to pay the fees, which are sometimes negotiated in the mortgage contract.
Navigating and understanding these fees can help borrowers anticipate the costs ahead and avoid unexpected challenges. But these fees are only the beginning of understanding the mortgage process. Simplifying the process should be top-of-mind for lenders looking to improve the experience of homebuyers and reduce the number of unexpected costs.
This is especially true for borrowers who do not fit the standard credit profile such as those who are self-employed or contract workers. These borrowers typically have a more difficult time getting approved for a loan.
Mortgage lenders work to simplify home loans & the mortgage process
Mortgage lenders are currently turning to digital solutions to help make the mortgage process faster, simpler and more transparent for borrowers. Through various online platforms, borrowers can apply, get approved and even walk through the mortgage process. They are often able to communicate with their lender and see the status of their loan. Some lenders can connect directly to consumers’ accounts to gather the information it needs, while others let borrowers upload their documents straight to the online platform.
This has made the mortgage process faster and kept consumers more informed throughout the process. But the mortgage process isn’t the only part of the process being taken over by digital. Some lenders, like us at Defy Mortgage, have begun exploring options to include digital currency investment portfolios as a way to help pay for their homes. The digital dollar could further reduce the time it takes to buy a home, and similar lenders are working to make that process simple for consumers.
How you can improve the mortgage process for yourself
As lenders work to improve the home-buying process, these are steps some consumers are taking to simplify the process for themselves.
- Get pre-approved: Getting pre-approved involves speaking to a mortgage lender and going over your finances including examining your credit profile and going through your debts and assets. The lender will tell borrowers how much of a home loan they are pre-approved for. Experts say this can simplify the home-buying process and allows borrowers to make informed decisions on which home to purchase.
- Gather your financial paperwork: Before starting the process title companies say borrowers should have all the paperwork they need in one place and easy to access. That’s because it will prevent having to search for the information when it is needed.
“It is vital that all of the information asked of you by the title company is given to them in a timely and accurate manner,” Cumberland Title said in a blog.
Lenders will often ask for documents such as bank statements, W2s, tax returns or statements for investment accounts.
- Request a remote closing: Some title companies have remote capabilities that allow borrowers to close on their mortgage from their own computer from anywhere with an online connection. And a survey of title professionals said that 62% of companies offering remote online notarization (RON - which is needed for eClosings) believe this offering will increase over the next year, according to a survey from American Land Title Association (ALTA).
“During the COVID-19 pandemic, the title and settlement professionals responded during historic mortgage origination volume to meet customer needs and deliver digital closings to help keep everyone as safe as possible,” ALTA CEO Diane Tomb said. “The desire for digital closings remains, and despite the drop in companies offering RON in 2021 from 2020, the percentage of transactions completed using this closing option held steady at 5%. This is a service industry, and our members will always provide the customers’ preferred closing method, whether it is online, in person or hybrid in some fashion.”
Looking for a secure and simple home loan process? Send us a message at [email protected]. We can help with that.