In Mortgage, Customer Experience Matters More than Ever. What Borrowers Expect & How to Deliver It

We write a lot about the tech that powers mortgages and the ways to optimize cost per loan. Underlying all these conversations, though, is the reality that applying for a mortgage is, for borrowers, an incredibly emotional experience.

It’s likely the biggest financial commitment the borrower has ever made. They’re probably worried about some aspect of the process: whether they’ll qualify for a loan, how much they’ll qualify for, whether they’ll qualify in time to make an offer on their dream home, etc.

Because of the sheer humanness of the mortgage process, it’s important that mortgage lenders pay attention to the customer experience – that is, to what it feels like for customers to apply for a mortgage. In this post, we’ll take a look at what borrowers want and how lenders can deliver on it to drive satisfaction and win loyalty.

Borrowers Want Digital Processes throughout the Mortgage Journey

First things first: the digital mortgage is here to stay.

Fully 92 percent of borrowers go through some of the mortgage process online, and 36 percent complete the application entirely online. For non-first-time buyers, 44 percent complete the full application online.

The main reason the all-online numbers aren’t higher might be a lack of opportunity: more than 60 percent of borrowers would complete the entire mortgage process online if they could. In many cases, though, the digital part of the mortgage experience ends after the borrower hits “apply.”

For example: only 13 percent of borrowers experienced a fully digital closing in 2021. 

What does all this mean for lenders? First, the push to digital isn’t just talk – and it’s not just a phase. Today’s homebuyers are increasingly digital natives who grew up with an internet-connected computer in their homes (if not in their pockets). The market is brutal right now, but leaders have made it clear that their plan for staying on top and preparing for the next boom cycle is to double down on tech investments that streamline every aspect of the borrowing process.

And it’s worth noting that tech alone won’t improve the customer experience. That tech should make applying for a mortgage better and, crucially, faster. When lenders take more than 10 days to make a decision on an application, customer satisfaction plummets by about 15 percentage points.

If you’re behind the curve on technology, don’t worry: there’s time to catch up. Just as important: tech isn’t the only thing that matters to mortgage borrowers.

Relationships Still Matter a Lot

I mentioned at the start of this piece that mortgage borrowing is a hugely emotional process for borrowers. Because of that, the human interactions borrowers have with lenders matter a lot. This is another reason to digitize wherever possible. When loan originators are supported by streamlined CRMs and document management systems, they can spend more time and energy talking and listening to borrowers and less hunting down and re-uploading their proof of income.

Just as important: many borrowers still choose their lender based on a recommendation from a human they trust (44 percent choose a lender their real estate agent suggests).

That’s huge for lenders who have built a business on relationships and referrals, as it signals that winning in organic search (or bidding sky-high for online ads) isn’t necessarily a requirement for winning customers.

Admittedly, the humans-plus-tech angle isn’t exactly a newsflash for the mortgage industry. For a while now, the narrative in many financial services spaces has been one of technology and humans working better together. But it’s still relevant: tech keeps evolving, and lenders have to keep up or risk losing customers who expect sleeker and sleeker experiences.

Now Is the Time to Implement and Onboard New Tech

So we’re in a moment where borrowers expect more and more of the mortgage process to be available digitally and the industry leaders (like Rocket and loanDepot) are going all in on tech investments. There’s a clear imperative for other lenders to follow suit.

But there’s a problem: we’re in a historic labor crunch, which is particularly acute for the tech workers who can build the kinds of digitizations lenders need to keep borrowers happy. When tech workers are available, they’re often unaffordable for mortgage lenders – or uninterested in what’s often perceived as a less-tech-savvy space.

In fact, the IT talent shortage is the main adoption barrier for 64 percent of emerging technologies right now – up from just four percent in 2020. But that may not be entirely bad news: as the economy tips toward recession, some employers are growing leery about hiring.

A more strategic way to implement essential new tech may be to partner with a provider who can build, deploy, and gracefully exit without your having to commit to long-term salary and benefits.

The Right Tech Partner Can Help You Win on Experience

CI&T's team has been building industry-defining digital experiences since the start. Our deep expertise in both mortgage and technology means we’re uniquely positioned to help mortgage lenders identify and implement the digital technologies that let them meet and exceed borrow expectations.

Interested in learning how we can help you develop a top-tier borrower experience? Get in touch.

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