In the lending world, loan origination is the process of applying, verifying, underwriting, approving, and documenting a loan. A loan originator is a person (or institution) who helps a borrower choose and apply for a loan – whether it is a home mortgage, car loan, business loan, student loan, or more. If a loan originator deals with mortgages, their job is to help clients estimate how much home they can afford, prequalify them for a mortgage, and guide them through the loan process.
This process can be very time-consuming for both parties. Up until now, the loan origination process has been a challenge for even the most dedicated professional. Keeping documents organized; coordinating with the borrower, lender, and third parties; and monitoring lending processes limited the number of clients each officer could take on. But today’s loan origination systems (LOS) are making a huge impact on the industry by making the process simpler, faster, and customized to individual needs.
Using Today’s Technology To Simplify Your Workflow
A LOS is a software platform that manages the entire loan process, from start to finish. Automating this tedious process will streamline your loan origination system and workflow, including the application, underwriting, and funding processes. Here are five reasons why you should invest a LOS to streamline your workflow and scale up your business.
- Improved user experience – improving overall user experience by catering to your target demographic and responding to their unique needs can boost business revenue. Investing in a loan origination system that does this will create return customers.
- Better risk assessment – a LOS that is customized for your business will help you perform more nuanced evaluations of borrower data and make decisions based on an individual’s risk profiles.
- Higher customer satisfaction – a personalized loan application process means a more satisfied borrower. Streamlining your loan origination system and workflow makes the process easier for the end user as well.
- Higher conversion rates – a customized LOS can offer borrowers more suitable loan conditions by analyzing their financial capacity and creditworthiness, which increases the likelihood of them signing on the dotted line.
- Faster loan application turnaround – automating the loan origination process allows applicants to receive a decision regarding their loan much quicker than before.
Five Trends To Watch For In Loan Origination Systems
While a savvy loan originator will learn how to use technology to attract new prospects, one of the biggest challenges of the loan origination process is to keep the client engaged and complete a loan application. Today’s borrowers are looking for an easy and quick loan application process that can be completed either by mobile or online channels. They also expect decisions to be made in a matter of minutes. Here are five trends in LOS technology that can enhance a borrower’s experience and increase your bottom line.
- CRM systems to improve customer engagement – a key component of today’s loan origination systems is a CRM system. Adding customer-friendly loan channels that are easy to navigate and streamline the application process to your LOS keeps borrowers engaged, creates a better relationship with customers, and improves conversion rates.
- Mobile apps – today’s borrowers are used to getting things done quickly and easily, on the platform of their choice. The option to begin a loan application on a computer and finish it on a tablet or other mobile device is a big plus for borrowers. Offering services via a mobile app is an excellent way to get applications coming in, manage the flow of data collection, and create better communication between lenders and borrowers.
- Automation – while this trend is beneficial for a lender’s loan origination system and workflow, the customer can also see a positive outcome. Automation is a huge time-saver for lenders, but it also accelerates the evaluation and loan decision process – allowing borrowers to learn the outcome of their application much faster and creating a better customer experience for the end user.
- Enhanced security members – with the rise in cyber threats and data breaches, security has become a top concern for those working in the loan origination To address this issue, LOS providers are investing in advanced security measures, such as encryption, multi-factor authentication, and secure data storage. This allows borrowers to rest easy, knowing their information is secure with the lender of their choice.
- Customization and scalability – flexibility is the key driver for today’s LOS market. Lenders are demanding customizable and scalable solutions to grow their business, but borrowers are benefiting from the resulting software. LOS platforms that have been tailored to a specific market reflect a shift toward solution-based and customer-centric software.
Grow Your Business With Scalable Lending Solutions
The future of loan origination systems is all about making your loan origination system and workflow simpler and faster. Overall, a LOS is a valuable tool that can help you improve the efficiency, accuracy, and compliance of your processes and enhance customer experience. For a loan originator who wants to stay competitive and provide high-quality lending services, a LOS is a must.
