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July 20, 2023

Mortgage Software Development

July 20, 2023
Read 9 min

Taking out a mortgage loan is a common practice that allows home buyers to obtain money from banks and other financial institutions to purchase a house. Often, this decision is one of the biggest in their lives, which underscores the level of accuracy mortgage software developers should consider when tackling such a sensitive issue as mortgage management software development.

When borrowers decide to take out a mortgage loan, they typically do a lot of research and deliberation. Additionally, the level of complexity that legacy banking institutions inject into the process makes it long and tiring for all parties involved. Nevertheless, the mortgage market continues to grow: about 70% of all homeowners in the USA have obtained a house through a mortgage loan, resulting in a total residential mortgage debt of $11 trillion for Q1 of 2022.Considering how important it is to have a robust and scalable software solution for mortgage lending, we expect that this sphere of financial operations doesn’t tolerate chancers. Only companies with deep expertise and a proven record of successful projects in FinTech can lead the way and make clients’ journeys to their homes less stressful.

mortgage software development

Mortgage Software Benefits

Sales operations streamlined

Sales and management processes in mortgage application software can be extremely complex and multifaceted. Mortgage documentation management involves entire banking departments, and the inflow of clients can cause document turnover to increase exponentially.

Digitizing and automating the mortgage sales process is the key to efficiently processing lending and client-related data. Additionally, streamlining management processes can help to gather all related information from different bank departments in one location, enhancing cooperation between departments and expediting decision-making.

Maximized sales and mortgages

Mortgage lending is a delicate sphere that requires a high level of consideration, particularly with regard to report origination. Mortgage automation software generates reports for different parties in the lending process, including borrowers, investors, and regulatory bodies, in an accurate and technical manner. This optimization helps lending companies to increase sales and mortgages while catering to the needs of a larger number of clients.

Processes facilitation

Mortgage software should address the two most complicated parts of the lending process: loan processing and facilitating property transaction closing times. A platform that allows borrowers, originators, processors, and underwriters to connect in real-time, assisted by automation software, is key to reducing processing time and completing cases faster. Embedded AI-backed software that helps fill out paperwork and identifies requirements also streamlines the process.

Increased revenue and improved efficiency

Mortgage software enables the processing of large numbers of loan applications and the management of more loans, thereby increasing workflow and income. The automation of many mortgage lending processes with the help of AI and Big Data reduces the occurrence of human error, leading to increased company revenue by eliminating the need for more time and effort in correcting mistakes.

Robust mortgage software in the origination stage of mortgage loans can alert borrowers and other entities involved in the lending process of any missing or incorrect data, as well as ensure compliance with recent local regulations. This significantly improves the efficiency of the mortgage lending process.

Better customer experience

According to a press release by the Bank of America, 81% of their clients’ mortgage applications in 2021 were initiated online, which is double the percentage of digital applications they received in 2020. This indicates that mortgage application development is on the rise in the USA, and the digitization of this banking sphere will only continue to grow.

Facilitating mortgage loan origination and shortening closing times can increase customer satisfaction. Additionally, the transparency of the system, which allows borrowers to know exactly which stage their case is in, can make the process less stressful.

Core Features of Custom Mortgage Software

Loan management

Mortgage loan origination automation software keeps the lender updated on the status of the loan, while automated reporting provides information on current installments. Advisory tools can predict the future status of the loan. Scalable, cloud-based mortgage industry software help manage the lifecycle of the loan and can be easily programmed to focus on specific tasks such as repayment tracking or synchronization of Uniform Residential Loan Application (Form 1003) and loan status values. The automation of tedious and repetitive tasks optimizes company resources. Additionally, robotic tools improve data accuracy in loan origination, ensuring a smooth and time-saving process for approvals and cross-verification at various management levels.

Client management

A Mortgage CRM system should address pain points in the mortgage lending process and be scalable enough to adapt to a growing network of clients. Lenders need to keep detailed data of borrowers and maintain timely follow-up with clients, in addition to managing the loan pipeline. Borrowers benefit from Mortgage CRM software as it keeps them up-to-date on important compliances and regulations provided by organizations like the Federal Housing Administration (FHA) and changes in Upfront Mortgage Insurance Rates (UFMIP). It also enables the upload of necessary documents, significantly speeding up the decision-making process. Ideally, the mortgage application software should also provide a support module and a chatbox to facilitate communication with borrowers.

Broker management

Efficient brokers fuel mortgage applications. One feature of mortgage management software is a virtual secretary function that helps organize brokers’ appointments and ensures their schedules do not conflict. Additionally, brokers can receive notifications for regulatory compliance, recent updates on regional mortgage loan policy, and feedback.

Streamlined accounting

A cohesive accounting module is a part of mortgage loan application software that streamlines all business and financial transactions. It allows lenders to track every approved or rejected transaction and offers various automated accounting reports. Mortgage accounting software analyzes overall payments and provides analytical reports for the future. It also provides bank reconciliation, alerts for duplicate payments, recurring bills, and approval processes, among others.

Analytics and reporting

Depending on a company’s specific needs, this may include various functionalities such as data visualization, business intelligence, performance metrics, risk analysis, portfolio analysis, compliance monitoring, predictive analytics, auditing and compliance reports, among others. Integrating analytics and reporting features can improve decision-making and operational efficiency for mortgage lenders and institutions. Such integration can also mitigate risks and provide a better experience for borrowers. By continuously analyzing data, the software can adapt to changing market conditions and customer preferences.

Third-party integrations

To develop successful mortgage management software, it is important to integrate with third-party services to maximize efficiency. These integrations could include KYC/AML providers, various payment gateways, business intelligence tools, accounting systems, cloud services, and legacy ERP systems. Integrating with open banking services can speed up the decision-making process for mortgage loans and reduce closing times by using financial data from the borrower, such as monthly income, taxes, loans, expenses, and bankruptcy filings.

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How to Develop a Mortgage Application Software

The mortgage industry has traditionally been a complicated sphere of banking activities, as it involves intense human communication, high levels of stress, and responsibility from all parties involved. However, with the development of state-of-the-art technologies, scalable, resilient, and omnichannel mortgage management platforms are becoming more feasible and increasingly popular.

At Itexus, we advocate for a unique approach to every client, pinpointing their pain points and helping them rise. In this regard, we offer a comprehensive guide on loan software development, including the vital steps to take on the road to your dream solution.

1. Market research

As a player in the mortgage business, lenders have an insider’s understanding of how the system works. Custom mortgage software could solve a wider range of issues and provide helpful guidance to first-time borrowers. It’s a good idea to survey competitors and explore innovative solutions coming out of the mortgage sphere.

2. National regulators

Mortgage compliance is one of the top concerns for banks that provide mortgage loans to borrowers. When developing software, it’s important to ensure compliance with local policies and laws, as well as to keep track of all changes in the regulatory field. In the USA, some of the important regulators aimed at protecting lenders and borrowers are the Home Mortgage Disclosure Act (HMDA), National Credit Union Administration (NCUA), Equal Credit Opportunity Act (ECOA), and others.

3. User experience

Mortgage software should have a mobile-friendly interface that is intuitive and easy to understand. It should also utilize encryption to protect sensitive user data, as well as include other essential functionalities to streamline mortgage loan origination and application tracking.

4. Trusted software vendor

Building mortgage management software is a challenging task and should be handled by professionals skilled in FinTech development. They will help with business analytics and technical specifications for the project, give mortgage application development cost estimation, assist in planning the roadmap of the project, and, what’s more important, help you to deliver and deploy your mortgage servicing solution.

Challenges in Mortgage Software Development

Mortgage software development comes with a set of challenges to navigate. By understanding and addressing these challenges, you can develop robust, compliant, and user-friendly mortgage software. Let’s check them out.

The complexity of mortgage processes

Mortgage lending involves loan origination, underwriting, documentation, and numerous smaller processes. Designing software that seamlessly integrates all of these tasks while ensuring accuracy and efficiency can be challenging. However, an experienced team of designers and developers can assist you with this.

Data security and privacy

Mortgage software deals with financial records, personal data, and other sensitive information. It is essential to implement robust data security measures, encryption protocols, and access controls to protect against data breaches and unauthorized access. For best results, it is recommended to work with trustworthy and knowledgeable experts in data security and privacy.

Integration with third-parties

Mortgage software is supposed to integrate with multiple third-party services – e.g., credit bureaus, payment gateways, document management platforms, etc. Ensuring seamless integration, data consistency, and reliable communication can pose technical challenges.

Legacy system integration

Mortgage institutions often have existing legacy systems in place. Integrating new software with legacy systems can be complex, requiring careful strategy consideration and planning, accurate data migration, compatibility testing, and other steps.

Data integrity and quality

When it comes to finances, any decisions should rely on accurate and reliable data. To ensure this, it is crucial to implement data integrity, data validation, and data quality control measures throughout the system. This can be challenging due to several factors specific to the mortgage lending process, including vast amounts of data, verifying the accuracy and authenticity of data, handling different data structures, avoiding data loss during integration, and others.

Summary

First-class mortgage management software helps professionals streamline multi-channel processes and financial transactions on a transparent, seamless, and easy-to-use loan disbursal platform. Custom mortgage management software development offers unique features tailored to the needs of your business, 24/7 technical support, and unmatched scalability as the solution grows with your client base. It’s also crucial to find a team with international security certifications.

If you’re struggling to find an ideal IT partner for mortgage software development, simply drop us a line. During a call with a specialist, share some details with us, and we’ll provide you with a quote in the shortest time possible.

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