LodeStar is excited to host a guest-authored post this week from BeSmartee’s Anthony Miller. BeSmartee offers an award-winning Mortgage Point-of-Sale (POS) platform for mortgage lenders.
Transparency is a difficult goal to achieve in mortgage lending. This is simply because of all of the factors involved in calculating closing costs — from real estate attorneys to lender fees and more. The complexity and variability of calculating costs adds to friction to the lending cycle, and is one of many components contributing to the notoriously long and tedious process mortgage lending is known to be.
Closing costs are often also a question mark that persists in the minds of borrowers, until they finally close on a property and can sometimes surprise (especially first time) homebuyers.
LodeStar’s closing cost calculation software was designed to ease this part of the process, and when integrated with BeSmartee’s digital mortgage point-of-sale (POS), lenders can give borrowers 100% real-time transparency into their closing costs. Aligning your borrower’s expectations and delivering speedy results are two of the most important factors in providing quality customer service as a lender.
Closing costs are expenses beyond the property’s price that buyers and sellers incur during a real estate transaction. They can include loan origination fees, discount points, appraisal fees, title searches, insurance, surveys, taxes, deed recording fees and credit report charges.
Closing costs range from 3%–6% of the home’s purchase price and vary depending on the state, loan type and mortgage lender. On average, homebuyers spend $5,749 on closing costs (including taxes).
Lenders are required to disclose these costs in an estimate in three days following a complete application. The estimate outlines closing costs and other loan details, and may change by closing day. Sometimes borrowers are more or less blindsided by the difference between their estimate and actual closing costs, which can cause significant stress and loss of trust with their lender.
When LodeStar’s closing cost calculator is integrated into BeSmartee’s mortgage POS platform, consumer information is automatically plugged into the calculator that is configured to your specifications. You can then instantly generate accurate quotes for title agent fees, title premiums, transfer taxes and recording fees.
Software is tricky. Without the right APIs, software solutions will not always play nice together. If your digital mortgage POS doesn’t integrate with your closing cost calculator, then you’re stuck manually keying in your borrowers information from the mortgage POS platform into the calculator.
This not only takes time, it opens the door to human error, inaccurate estimates and unhappy customers. It also defeats the purpose of automation, and prevents the possibility of providing real-time information.
Integrated solutions, on the other hand, will automatically transfer and verify data from the POS to other steps in the lending cycle, like calculating closing costs. This saves loan officers enormous time by sparing them from re-entering information or performing manual calculations.
Customer satisfaction can be improved when borrowers aren’t left in the dark about their loan application. The less time they spend anxiously waiting for information, the more they know about the next steps and the more their loan officer can act as a liaison, the more confidence they’ll have in you as a lender.
When complete transparency and speedy service are enabled, lenders and borrowers win.
BeSmartee and LodeStar help lenders ensure compliance with expanding mortgage regulations and reduce their workload by automating closing cost calculations. We also help borrowers by delivering accurate fee estimates in real-time, which ensures they won’t be surprised down the road by unexpected costs and reinforce trust in their lender.