Mortgage Refinance Trends in 2020
2020 has seen a strong start in the mortgage business for new home loans and refinances. In the first month itself, refinancing led the surge, thanks to a drop in mortgage rates. According to data from the Mortgage Bankers Association (MBA), applications for refinance jumped 43% and were 109% higher than a year ago. The refinance share of mortgage activity increased to 62.9% of total applications from 58.9% the previous week.
MBA economist Joel Kan noted that refinances increased for both conventional and government loans, as lower rates provided a larger incentive for borrowers to act. Trends like these are an indicator towards a possibility that mortgage rates may continue to stay low for most of 2020. This would help the home buying market as well as refinancing activity, which would mean that there are chances of loan applications going up as compared to the early part of 2019.
What the Boom Means for Lenders
A boom in refinance means lenders will have to close the loop on refinance loans faster. In the process, an important aspect for mortgage lenders is to maintain accuracy in processing and also keep the turn-around time low at all times. Lenders need to show agility and need to be prepared to capitalize on the housing trend and take on these high loan volumes.
Role of Contract Mortgage Processing Provider
It may not always be easy for lenders to find all the expertise required for refinancing in-house. At all times, their teams need to be ready to face the evolving competitive market, meet borrower expectations, improve closing ratios and focus on reducing the cost of origination. One of the best ways is to tie up with reliable contract mortgage processing provider, who can manage the heavy lifting for them.
A contract processing partner can offer end-to-end services for refinance right from loan origination, processing, title ordering, appraisal, underwriting, closing and post-closing. By outsourcing refinance processing to a contract mortgage processing partner, lenders can perform better in a competitive and dynamic environment while efficiently maintaining a loyal customer base.
Adding Value to Refinance Through Technology
Another important requirement in today’s evolving competitive landscape is for lenders to take a holistic approach to refinancing by streamlining processes through automation wherever possible. Strong technology can automate processes, maintain accuracy while performing the necessary quality checks. While several mortgage lenders are now investing in the right technology platforms to fulfill these needs, it may be difficult to find one solution that meets all requirements.
An effective way to deploy technology and offer a seamless digital experience to customers is to partner with contract mortgage processing providers who have a strong digital footprint. By choosing a technology-based service provider who can fulfill their requirements, lenders can continue to focus on their core activities.
A contract mortgage provider who has access to the best of technology and maintains high-quality standards in compliance can help accelerate the refinance process along with quickening the existing loan termination process. Most often, such providers also offer strong client service support to reduce the overall loan lifecycle time. This not only provides scalability to the mortgage lenders but also brings in the flexibility to take on more volumes and add additional profits.
Outsourcing mortgage and refinance processing services to a contract mortgage processing provider can help lenders streamline operations and benefit from improvements in accuracy and efficiency. These partners will enable to close the refinance process faster and maintain the lowest possible cost per loan. Outsourcing will also prove to be a likely way to increase customer satisfaction.
PrivoCorp is one such contract mortgage processing provider that can help lenders save considerable time and costs, improve resource utilization and refinance experience for borrowers. Talk to PrivoCorp today!