Why Provide Digital Pre Approvals?
Applying for a mortgage can be a daunting process for some. There are many people that do not believe they know enough about personal finances. This may lead people to be unsure of what they are doing when they go in person to a bank or credit union to apply for a mortgage or other loan.
One of the scariest parts of the process for people can be the pre approval process. The possibility of being rejected for the amount they want for their dream home. With digital pre-approval, a lot of those anxieties can be avoided.
What is Mortgage Pre-Approval?
When applying for any loan, you must first be approved before the broker proceeds any further. You are being approved for the amount of money you were seeking to borrow to finance your new home.
The approval process includes a look into your personal finances. Brokers will focus on your ability to keep up with interest payments on your mortgage. This means a broker may look at your annual income, credit score and any other assets you own.
Those values will determine what loans you qualify for. This includes the interest rate that you will be charged. The better your personal finances look to your broker, the better the interest rate on the loan will be.
Digital Pre-Approval: What is it?
Digital pre-approval is not any more complicated than the traditional pre-approval process. Digital pre-approval actually is easier than traditional approval. This is because you do not need to provide physical proof of your financial documents.
In digital mortgage origination, the borrower will simply upload their info into the program that the broker provides, and the straight-through processing system will then take action.
The online software takes the place of any manual labor that would go into a traditional mortgage origination process. There is no loan officer, paperwork etc. The entire transaction takes place online.
Benefits to Online Mortgage Origination
Digital mortgages provide plenty of advantages that a traditional brokerage could not offer. For example, digital mortgage applications can be completed within 15 minutes. Traditional applications can take an hour or longer because of all the paperwork that must be provided and filled out.
Another advantage is that the application can be completed anywhere with access to the internet. This benefits borrowers who may not live in the United States and cannot visit a bank or lender. The online process also simply offers a luxury to borrowers who may just not want to go through the traditional process.
Digital loan origination provides a certain level or personalization for potential borrowers as well. As data is collected from borrowers, they will then have personalized loan options available to them. This is a benefit to borrowers that the traditional application most likely would not offer.
Who Provides this Mortgage Technology?
Fintech companies, such as OnlineApplication, provide the technology for online mortgage brokers. The programs they provide can be chosen by personal preference of the mortgage broker. This is another advantage to digital pre-approval. If the process matches the preference of the broker, the process will end up being easier for the borrower as well.
Having a third-party provider is beneficial because it allows for a digital mortgage broker to focus on mortgage origination and not developing the technology they need to process applications.
Digital Pre-Approvals: The Bottom Line
Online loan origination is the future of the mortgage process. Like many things in our lives that continually become more digitized, the mortgage origination process is following the trend.