Welcome to the BeSmartee blog. Enjoy a wide selection of articles related to mortgages, the industry, and real estate.

What Is a Digital Mortgage?

By Laura Agadoni · Jun 2, 2016 · Mortgage

What Is a Digital Mortgage?

Image courtesy of Flickr, r.g-s

With a digital mortgage you might still meet with a loan officer, but if you do, you don't do so in person.

The traditional way to get a mortgage involves meeting with a loan officer at a financial institution and sitting down with that person to discuss your financial information. You then fill out a mortgage application and supply the lender with all sorts of documentation, such as bank statements, pay stubs, and tax returns, which you need to gather and mail in or bring in. You then can expect to go through a lot of back-and-forth meetings to get the deal accomplished.

With a digital mortgage, you might still meet with a loan officer, but if you do, you don't do so in person. You "meet'' over the phone or through email. You'll still need to provide all the same documents, but you do so at home using your computer, smartphone, or tablet in a paperless transaction, not by sending paper documents through the mail or bringing them in. You can sometimes, if you choose, even authorize the digital lender to access your financial information, saving you the step of gathering the documents yourself. This makes the process even faster and easier for everyone involved.

The Value of a Digital Mortgage for Lenders

1. It Gives Lenders a Competitive Edge

Consumers are increasingly going digital, and the mortgage loan process is something consumers expect to be digital as well. A growing number of borrowers don't want to deal with face-to-face, time-consuming meetings that involve lots of paperwork. They want to log in to a lender's digital site and get everything done online.

2. Digital Mortgages Provide Accuracy

The digital mortgage process is a more accurate way for lenders to record information. It lessens the potential for human error, such as spelling or address errors, or even income errors. When the process is automated, there are fewer chances for mistakes to be made.

3. Going Digital Frees Up a Loan Officer's Time

It's time-consuming to conduct one-on-one sit-down meetings at the office. When borrowers can do everything themselves, including getting complicated questions answered right in the digital mortgage application, loan officers have more time, time they could use to oversee even more loans.

4. Digital Documents Are Easy to Manage

The loan process is complicated. Lenders first prequalify borrowers and then have them fill out an application and send in documents. The loan then goes through underwriting, processing, closing, and loan servicing. When these steps are automated and digital, everything is more efficient since everything could be stored in cloud-based software instead of having a variety of companies involved with storing various documents.

5. Digital Documents Provide Better Efficiency

The digital mortgage process is also more efficient than the traditional paper-based system. It allows for a more consistent way to handle data. Variables, such as how calculations are determined and how data is interpreted, are made consistent by having one digital source handle everything.

The Value of a Digital Mortgage for Consumers

1. The Digital Mortgage Process Is Fast

It typically takes weeks to approve (or deny) a mortgage loan the old-fashioned way. But with a digital mortgage, consumers could get an answer in a matter of minutes, hours or, possibly, a few days. And in a seller's market with little inventory, this could mean the difference in getting the home you want or missing out, possibly to a cash buyer. Speed is such an important aspect of getting a mortgage approved that 36 percent of millennials said in a 2015 J.D. Power study that they'd pay extra for fast processing.

2. The Digital Mortgage Process Is Simple

Most consumers view the gathering of documents to be the most difficult part of the mortgage loan application process. More than half the time, according to the J.D. Power study, the documents consumers send in aren't the correct documents. This means the lender must go back to the consumer to ask for additional documents. With digital mortgages, however, if the consumer chooses, they can give the lender access to their financial accounts, and the lender will get the documents needed.

3. The Digital Mortgage Process Provides Transparency

The digital mortgage process allows consumers to check the status of their loan application any time. They simply log into their account from their computer, smartphone, or tablet. They can also determine whether all the documents were received, or if any additional documents need to be uploaded.

4. Borrowers Are Exposed to More Choices

It's easier to shop multiple lenders online than it is to go "old school'' by calling or going into multiple financial institutions. With a digital mortgage, consumers can rate shop online, which lets them see all their options, not just what a few local lenders offer.

5. Borrows Could Save Money

You might find a better deal with an online lender. They tend to be motivated to offer you a lower interest rate, lower fees, or to offer you more flexible terms. They do this because of the greater competition online. Closing costs tend to also be lower since there is less overhead when everything is done online versus in an office.

About BeSmartee

When you choose BeSmartee, you can see from our secure platform all the loans you qualify for. Most consumers see about 200 loans. The lenders you'll use through BeSmartee will have the latest technology to make your digital mortgage process easy and transparent. We also screen the lenders we work with to ensure they are competent and ethical. You could be approved and could close on a mortgage loan through us in as little as 15 minutes.

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