MEQUON, Wis. (10/17/11)--Lenders with competitive online rates, optimized websites and integrated point-of-sale (POS) platforms are best positioned to succeed in attracting mortgage loan applications, according to a study of consumer-direct online mortgage applications submitted in 2010 to mortgage lenders. In one segment of the study, the Benchmarks 2011 Report by Mequon, Wis.-based Mortgagebot, such lenders garnered eight times more application volume than their less successful counterparts, the company said. The study aimed to identify methods that optimize lenders' online presence and maximize application volume. "The study's breadth of information gives banks and credit unions a vital tool for success in the consumer-direct, Web-based mortgage channel," said Rick Allen, Mortgagebot senior vice president of client services. In the study, about 40% of lenders surveyed take more than 25% of their loan applications online. Other trends:
* Mortgage shoppers actively research interest rates online. Fifty-four percent of visits to lenders' sites were to check rates, suggesting that lenders must "present accurate, risk-based pricing and detailed fee quotes to meet borrower expectations," said Mortgagebot. * Mortgage shoppers will devote time to complete online loan applications. More than one in six visitors spend more than 16 minutes on a lender's website, excluding visits that were less than a minute. If shoppers don't have enough time to complete the transaction, they will come back--48% of applications were submitted over multiple sessions, with 90% of the returning users submitting their application within two weeks of starting it. * Mortgage shoppers are highly inclined to submit applications online. Give a simple, optimized application experience, 72% of online borrowers who were eligible to complete their loan application online chose to do so.
With the data, lenders "can benchmark the success of their websites and pinpoint methods proven to be most effective in increasing loan volume," said Allen. "And mortgage lenders that have not embraced the online channel can see what's possible with the right tools." Online applications in 2010 in the report had a median credit score of 757, a median household income of $90,000, a median borrower age of 42, and a median loan-to-value ratio of 70%. Other findings:
* Borrowers want to apply on their own terms. More than one in three consumers elects to apply online during non-business hours, when branches are closed. * Simple navigation increases the likelihood of capturing applications. A panel of testers took 24% more time and 24% more clicks to reach the application entry page at less successful sites. More successful sites reaped eight times more loan volume.
The study aggregates data from Mortgagebot's PowerSite platform, responses from its annual partner survey and independent research. It also indicated that lenders who not only maintain online presence to reach consumers but also adopt an efficient online platform reap the greatest awards.