A borrower searching for information on a lending website

Using AI to Enhance Borrower Education

The mortgage industry has two distinct borrowers—first-time buyers and refinancing homeowners. Although these two groups have different expectations, they both agree that their borrowing experiences leave a lot to be desired.  Approximately 50% of first-time buyers and refinancing homeowners are dissatisfied with their experience.  

For those looking to purchase their first home, they ranked exceptional customer experience as the primary reason they selected one lender over another. For those refinancing or purchasing a second home, mortgage rates were the determining factor in choosing a lender.  For both groups, their primary complaint was the inability of lenders to “get things right the first time.” So, how can mortgage lenders do a better job of meeting expectations?

Understand the journey.

The best way to meet and exceed expectations is to understand the borrower’s journey and address its friction points. Over 90% of people begin their journey with an internet search. Their specific search requests may vary, but the overall goal is information on such topics as:

  • Understanding the mortgage process
  • Locating local lenders
  • Finding current mortgage rates
  • Looking at real estate listings

New home buyers are looking for information, while those looking to refinance are focused on finding the lowest rates. That’s why mortgage lenders need to first identify the borrower as quickly as possible.

Identify the borrower.

Go to a mortgage lender’s website. Odds are you will find a home page with links to different products and services. You may have to select a drop-down to find a listing that includes home mortgages. After selecting the link, you are given the option of buying or refinancing.  It has taken a minimum of three steps for the borrower to get to the information they need and for lenders to identify the borrower.

Having to drill down to find information can be frustrating. It’s like being transferred from person to person on a phone call. People just want someone to answer their questions without being placed on hold. In the virtual world, just a few minutes can feel like an excruciating amount of time. The average website visitor spends less than six seconds reading a homepage’s content. If they can’t find what they’re looking for, they move on.

Using a mortgage automation platform can reduce the three steps to one. When the borrower goes to the website, a chatbot provides possible topics of interest such as applying for a mortgage or refinancing an existing one. Visitors select from a list of common topics or enter one of their choosing. In one step, borrowers have access to the information and borrower education they need.

Answer questions.

Once the borrower’s purpose is identified, it is much easier to provide the right information. In fact, a lot of borrower education can be automated.

Refinancing.

Since rates are the primary concern of refinancing borrowers, there’s no need to send them down the same path as first-time buyers. Instead, direct them to a page that outlines current rates. 

This doesn’t mean you should treat the rates page as the end of the journey. Visitors may have questions. What is the criteria for refinancing a second home? Does it make sense to refinance if there are only five years left on the loan? What information is needed to start the refinancing process?  

With AI, chatbots can answer questions, direct borrowers to more information, or connect them with a loan officer. AI gives visitors the personalized service they want without taking a loan officer’s time away from more important tasks such as closing a loan. AI can also improve the employee experience by supplying answers to frequently asked questions, freeing them to deliver customized service. 

First-time buyers.

Customer experience determines which lender a first-time buyer chooses. If lenders want to convert visitors to buyers, they have to ensure an exceptional experience which means:

  • Personalizing the experience
  • Providing self-service options
  • Presenting consistent messaging

Using AI technology enables lenders to deliver positive experiences without adding to a loan officer’s workload.

AI helps to personalize a borrower’s experience.  Potential home-buyers can ask questions and receive answers tailored to their needs. Responses are delivered based on user interaction. Visitors to a lender’s website can be directed to online resources or a loan officer depending on the complexity of the response. Borrowers don’t feel they are given standard responses that do not meet their needs.  

A recent survey found that 67% of consumers prefer a self-service option compared to speaking with a human.  If lenders do not provide users with the ability to self-educate, they may lose potential borrowers. AI solutions can quickly direct users to self-service options. Whether it is a payment calculator or details on FHA or VA loans, site visitors can be directed to the specific resource through AI technology.

AI ensures consistent messaging. In the rush to respond, an employee may email an old rate sheet to a borrower. With AI, data is validated to prevent inaccurate information from reaching a home-buyer. This ability is crucial if lenders want to “get it right the first time.”

Deploy AI.

Most first-time home-buyers do not fully understand the process, but they would prefer to educate themselves on what is required. AI enables lenders to deliver that self-service option without making potential borrowers feel like a number. The technology can address the majority of questions without human intervention. It can even deliver similar messaging to employees who may have questions or need access to specific data.

Educating borrowers is part of their journey, but it doesn’t have to be time-consuming for employees or frustrating for borrowers. Deploying AI technology enables lenders to identify the borrower and deliver the right information at the right time. There’s no need for site visitors to click through pages to find the data they need. Instead, they can be directed to the best source for answering specific questions. 

If you’re interested in taking a closer look at AI and the borrower’s journey, click the button below