Federal Reserve Chair Janet Yellen recently indicated the market was not ready for an increase in interest rates. What does this mean for those looking to buy or refinance a home? Jump on the opportunity, but proceed with caution.
Mortgage rates are currently flat and likely to fall in the coming quarter. It's imperative that borrowers vet their options when looking for a home loan lender. While some borrowers may feel more comfortable and familiar working with traditional banks, don't discount the benefits of online home loan lenders. Without the overhead of brick-and-mortar locations and the ability to maximize use of technology for speed, efficiency, and competitive pricing, online lenders may be able to offer more competitive terms and are quickly taking over market share.
To learn more about what lenders should look for when finding the right virtual home loan company, I spoke with Tri Nguyen. Nguyen is the founder and CEO of Network Capital, one of the top online mortgage lenders in the country. Here's what he had to say:
What are the key opportunities for those looking to finance their home through an online company?
To me, there are five key components to look for in a home loan lender: accountability, competitive offers, convenience, service, and speed.
With an online mortgage lender, it is even more important to uphold a superb online reputation. We make a concerted effort to deliver what we preach and when an issue arises, we go above and beyond to make it right as our commitment to customer service.
There are dozens of mortgage lending firms online, and reliable banks in every city, which increases competition, and thus borrowers must do their research to make sure their fees and rates are as low as possible.
Due to our centralized, streamlined processes, costs are significantly reduced, and savings are passed on to our consumers. The largest banks have centralized mortgage operations as well, but they also must pay the overhead of having a branch location.
Pretty much everything we do in daily life can be done remotely, electronically, and whenever we have time. Network Capital works in the same way. We have extended operating hours and provide weekend support to make sure we're available as much as possible for our clients, and that is an important aspect for anyone looking into buying or refinancing their home.
In line with our commitments to accountability, service and convenience, we're committed to the best customer service. Naturally, some borrowers may be hesitant to secure a loan or refinance outside of a brick-and-mortar bank, so it's imperative as an online lender we go above and beyond to be available and answer all questions that may arise in the process.
We call our staff 'Elite Mortgage Professionals' because they are trained by some of the best in the industry, thus allowing them to provide the best expert advice and put our clients in the best financial position.
One of the huge advantages working with an online mortgage company is expedited processing. Through our technology partners Oracle, Cisco, Microsoft, and Redhat, we're able to automate the verification process while increasing accuracy and ultimately allowing us to close loans in as little as 10 business days. We've implemented service level agreements throughout the organization to make the process as quick and painless as possible.
Why would a prospective borrower choose to go with an online lender, such as Network Capital, versus a traditional bank?
In the past few years, cash buyers have been able to negotiate and obtain some of the best home deals, scooping up over 30 percent of the housing market in the process. At Network Capital, we offer a "Same as Cash Offer", which allows lenders to compete against cash buyers while meeting the close of escrow deadline. Online lending helps to flatten the playing field, giving prospective homeowners "same as cash" buying power.
The only portion of the loan that would be needed to complete the process is an acceptable property. Potential homeowners can then go shopping confidently.
Mobile is the way of the future. How do you see mobile apps influencing the house hunting process for consumers?
Mobile apps in the home loan industry are budding. There is a need for them to allow customers to track loan terms, interest rates, the loan process, acknowledge terms and even image transferred documentation. This will allow homeowners to have control of their loan on their time and terms.
Network Capital is in the final stages of releasing a mobile version. We are committed to functionality and seamless workflow, but security is the top priority, so we've been rigorously testing the functionality and security for possible flaws.
What role does enterprise software play in helping consumers get financing?
Through our technology partners, we're able to electronically download most of the documents required from the borrower, within minutes, to close a loan. This allows us to automate what was once painstakingly tedious tasks while increasing accuracy.
There are safeguards in place that require the BWR's authorization to gain access, so it's safe and secure process.
Additionally, technology allows us to place our clients in the best program. However, there is more to that than meets the eye. Typically, when companies slash costs and give rock bottom rates, you lose service and speed. I believe this is where the expertise of our Elite Mortgage Professionals is imperative.
We take into consideration our client's short and long-term goals, as well as current and future financial snapshots to plan the best program possible. This allows our company to explore all avenues which can help spark new ways to save for the client.
What do you predict the future of the home loan industry will look like in 3-5 years?
Through evolving technologies, the lending process will become much easier, faster, less costly, and even more transparent for the end consumer. Innovative ways to verify information and make credit decisions are growing by leaps and bounds already. This will allow many new products and investors to enter the marketplace while mitigating default risks.
I think the smaller, less competitive players will be weeded out through compliance and software development costs, but the ones that get it right will be left. That's where we intend to be.
From mobile apps to enterprise software, technology is changing how consumers shop for mortgages and manage their home loans. Whether you're a first-time homebuyer or experienced homeowner, keep a close eye on these trends and how they impact the real estate market.