With mortgage rates still at historic lows, there are more individuals looking to purchase. Credit unions can take advantage of this and refresh their current mortgage lending practices with technology that will allow them to better compete in this market. Simply having a mortgage loan application on a website is not enough. Consumers, especially millennials looking for their first home, want an easily accessible digital experience similar to purchasing an item on Amazon. Of course, buying a home is more involved than that; it may be one of the biggest purchasing decisions of their lives. However, they fully believe that it should not be a difficult process.

How Does This Happen?

Traditionally, credit unions have only entered the member homebuying journey at the last step: application submission. With more prospective homeowners shopping for home loan pre-approval, credit unions need to enter the process earlier. However, this challenge is twofold: to gain first contact and then to own the member homebuying journey: from research to finding an agent, the house and finally making a purchase. By bridging the gap between home discovery and financing, credit unions can build deeper relationships with their members as well as guide them through what can often become a challenging process.

The homebuying process we once knew has changed over the years, due to the digital transformation that has occurred in our industry. Homebuyers rarely visit branches to discuss their mortgage needs, if they come in at all. The initial process has turned to online searches – especially for millennials, the new target market for homebuying. What this means is credit unions need to have the necessary technology in place to facilitate the all-online experience.    

Recent articles and studies indicate that millennials will account for 80 percent of real estate transactions in the next decade. This generation expects an easy, end-to-end experience that’s digital-first and personalized to their needs. But the question remains:  what can be done to bridge the gap between the lender and the real estate professional and the consumer, ensuring a seamless homebuying experience during the entire home purchase process? One study by Marqeta, a
fintech startup, notes that millennials are typically less loyal to their
primary financial institution than previous generations; 58% of millennials
would consider switching to a new financial institution if Google, Amazon or
Facebook entered the industry; and 45% would consider moving to an independent digital-only bank. Armed with this information, credit unions must determine what they can do to add value to their mortgage loan process, such as
introductions to real estate professionals, personalized support and/or
guidance in finding an affordable home.

How Can This Happen?

A credit union’s website is often the first place a prospective homebuyer will visit when comparing rates. Ensure the page is clear and easily accessible. Are there features to make your website stand out compared to competitors? If not, this is your chance to personalize a member’s digital house hunting experience. Rather than a flat page with static information that only has a listing of available loan
officers or mortgage applications displayed, give them what they don’t yet know
they want (and/or need). Provide a site that includes all the steps needed in
the homebuying process:

  • A good mortgage rate
  • Help with the process through live chat bots
  • An easy end-to-end process (from pre-approvals to finding an agent to the needed documentation to closing)
  • Available properties that meet their criteria

Remember, many members will also search via their mobile devices, so focus on a mobile-first approach. According to the 2019 Borrower Insights Survey from Ellie Mae, 50% of borrowers said they chose their lender based on the existence of an online application or portal. Having a portal that can be accessed on mobile is
also a solid method of maintaining a presence with members throughout their
homebuying journey.

They also want an easy process. There are end-to-end personalized, self-service platforms that are making it easier for consumers to look for homes, find agents, get alerts as new listings become available, all from one online location. The benefits of this is that homebuyers will remain on one platform: pain points can be easily addressed; and mortgage and real estate support can be available throughout the homebuying journey.

What Makes For a Better Experience?

Of course, moving the mortgage application process online can only go so far in reducing closing times. To have a more significant effect, credit unions must consider the entire homebuying cycle. This can be addressed by expanding their offerings to encompass every stage in the homebuying process, including:

  • Neighborhood discovery to help members research areas that fit their needs and budget
  • Educational content that helps members understand the scenarios they face today
  • Property searches integrated with local MLS data to help members find their ideal home
  • Realtor networks to build relationships with trusted local real estate agents and connect them with qualified homebuyers
  • Personalized lead nurturing to grow relationships with prospective members over the long term
  • Platforms that offer members insight on their homes’ value over time and identify refinancing opportunities

Even though improvements have been made in the online home search process, members still experience disconnected technology platforms throughout the homebuying process. And as a result, they often face a drawn out and fragmented home purchase process that increases confusion and reduces transparency, which is not good for any of the parties involved.

Rather than trying to build their own innovations from scratch, credit unions should focus on modernizing their infrastructure. Once those improvements are in place, they can partner with technology providers, leveraging their expertise in serving real estate consumers online to quickly implement custom-branded solutions that will delight members.

By working with technology companies to digitize the borrowing process and offer an end-to-end homebuying experience on a single platform, credit unions can reduce closing times, build a strong foundation for the online future of lending and increase member loyalty.  After all – it is the member experience that is so very important.

Tim Bohlman is the chief technology officer of CU Solutions Group (CUSG), and the chief operating officer of CUSG’s Technology Solutions. CU Solutions Group is a national credit union service organization offering industry-leading products and services in the areas of technology, marketing, HR performance and strategic advisory. He can be reached by email at Tim.Bohlman@cusolutionsgroup.com

Marcos Carvalho is chief revenue officer of Boston-based NestReady, a technology company bridging the gap between home discovery and financing to connect lenders, homebuyers and real estate agents through the entire home purchase process via a stack of white-label solutions and predictive analytics models. He can be reached by email at marcos@nestready.ai