Over the past several years, many banks, credit unions, and independent mortgage banks have focused on implementing digital technologies to improve and accelerate their mortgage processes. As such, these lenders can offer borrowers better experiences through automating processes.
The global digital lending platform market is forecasted to grow to $20.5 billion by 2028, which means traditional banks and credit unions must digitize their mortgage processes end-to-end to compete for a share of this market with fintech firms.
Today, it’s easier than ever for lenders to work with homebuyers through the entire origination process on digital channels as automated processes allow lenders to operate faster and more efficiently. Additionally, more homebuyers are gradually opting to move to digital channels to complete the mortgage process.
According to a survey from Fannie Mae, during the first quarter of 2021, 12% of homebuyers conducted their transactions completely online, up from 7% in the same period in 2020. And during Q1 2021, 46% of borrowers preferred to review their final loan documents online, up from 42% during the first quarter of 2018.
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A mortgage point-of-sale (POS) platform is one of the tools that facilitate the digital loan application process for lenders and borrowers. It also enables lenders to communicate with and guide homebuyers to complete all the necessary steps in the process.
A POS platform lets borrowers quickly and easily apply for mortgages, submit the required documentation, track the progress of their applications, as well as communicate with their loan officers from anywhere via desktops, tablets, or mobile devices.
Lenders also benefit from a strong POS system as it simplifies the mortgage application process, increases efficiency, digitizes the standard 1003 application form for a better user experience, and improves the overall homebuyer experience.
But not all point-of-sale systems are the same. Although there are numerous POS systems available in the market, not all fully integrate with lenders’ mortgage loan origination systems (LOS).
A loan origination system automates and manages all the steps in the loan process. Lenders use the LOS to underwrite and process the loan after it is submitted from a POS platform. Loan origination systems handle several activities, including document management, verification, pricing and eligibility, compliance, underwriting, and fulfillment.
Loan origination systems typically integrate with other key systems that involve the mortgage process, including compliance tools, customer relationship management systems, POS systems, as well as document preparation firms and other vendors.
Why You Need the Right POS/LOS Integration
Understanding how POS and LOS systems work together is key to helping lenders identify any gaps in their technology. Although the LOS does the bulk of the work when it comes to mortgage lending, it’s beneficial if data can be automatically and effortlessly transferred between the two systems to keep borrowers informed of the status of their loans.
Today’s homebuyers expect speed, convenience, and top-notch service. To keep their borrowers happy, lenders must meet those needs and communicate clearly at every step of the mortgage loan process. Finding the right POS system and integrating it with their LOS helps lenders meet – and exceed – those needs while also streamlining the backend.
Check out our latest free eBook to learn more about the importance of POS platforms and the top ways you can ensure that your LOS integrates well with your POS.