The loan application submission rate is a crucial metric for mortgage lenders. It’s a conversion rate that indicates how many applicants are serious about getting a loan with a particular lender. In addition, the loan application submission rate is related to the pull-through rate, which calculates how many loans are funded compared with how many applications are submitted.
Improving the loan application submission rate, even by just one percent, can lead to a significant revenue increase.
To improve overall loan application submission rates, it’s essential to recognize the factors that impact them. This article will review common factors that can affect a loan application submission rate and offer advice for mortgage lenders who want to see that rate increase in the coming year.
5 Factors That Impact Loan Application Submission Rates
Many mortgage lenders spend the bulk of their time focusing on working directly with customers instead of thinking about their websites. However, investing some time and resources into the application experience can improve loan application submission rates and lead to a noticeable revenue increase.
Here are some of the most common factors that affect loan application submission rates. Fix these to see more conversions.
1. User interface (UI) and user experience (UX) design
In the digital world, UX/UI design is integral to the success of a digital application, whether it’s a mobile app game or a mortgage application. The easier it is for users to navigate through a website or application, the more likely they are to land on the right page. At the same time, the design needs to be intuitive and responsive.
Today’s consumers are digitally savvy. They don’t hesitate to bounce from an unresponsive website, meaning it takes a long time to load or gives them an error message. They also won’t hesitate to leave a website that uses complex language or is riddled with errors.
Mortgage lenders need to closely analyze the UX/UI of their website through a user’s eyes. How long does it take to load? Is the information easy to find? What is the navigation process, and how accessible is it for the average user? What is the experience like across devices, including desktop, mobile, and tablet?
2. Conflicts within a tech stack
Mortgage lenders need a tech stack that can integrate seamlessly. One study found that today’s companies use an average of 37 different tools to run their operations. They range from productivity tools to accounting tools, marketing tools, automation tools, and everything in between.
The more tools that are added to a tech stack, the more potential for trouble. Just one broken link between tools can lead to a negative user experience or, worse, lost data that can negatively impact the application submission process.
Companies need to find an expert to help them identify the tools they need and which ones are just getting in the way of progress. Often, companies have dozens of tools but only really use a few. Cutting down on tools and getting the right ones to integrate can save money while improving efficiency and overall customer experience.
3. Applicant fatigue
Applicants might get partway through the application process before getting fatigued and abandoning their application. If this happens, then it is unlikely that the applicant will ever return to complete the form and submit it.
Several things can lead to applicant fatigue.
It might be that the application asks for too much personal information, including things that the applicant needs to track down from different documents. One study found that 40 percent of applicants who abandoned the process cited the excessive amount of information required as the reason for their abandonment.
It could also be that the application doesn’t load correctly on their device, and they don’t want to switch to another device. Or they might get distracted by something else and forget about their application altogether, indicating that the application process was likely too lengthy.
The underlying commonality between all of these things is that people are busy and tired with short attention spans. Therefore, an application needs to be simultaneously easy to submit and thorough enough to deliver enough information for a lender to make a decision. Using digital tools that can streamline this process on the consumer and lending end will help improve submission rates while giving lenders the information they need to move forward.
4. Increased competition
The mortgage lending market is quickly getting flooded with non-bank entities that utilize technology to streamline the entire process from start to finish. These often offer an Amazon-like experience for consumers, delivering one-touch applications that are a breeze to complete and submit.
Many banks are still lagging, relying on cumbersome manual processes that slow down the application process. Instead of thinking like a bank, they need to think like an ecommerce platform and find ways to streamline and automate their application process to improve application submission rates.
5. Poor website design
One way to increase the loan application submission rate is to increase the number of people who land on the application page. After all, the more people who land on an application page, the more opportunities for them to submit an application.
It sounds easy in theory but can be more complicated in practice, especially when considering the difference between the application on mobile versus desktop devices. Mortgage lenders should work with a website expert to help them improve their website’s responsiveness across devices and ensure that the application page is easy to find and use.
Get Advice on the Digital Tools That Can Improve Loan Application Submission Rates from LendArch
Mortgage lenders are financial experts who understand the ins and outs of the industry. They can benefit from technology experts who can help them identify gaps in their tech stack to improve the customer experience and increase loan application submission rates.
LendArch helps mortgage lenders determine the best digital tools for their processes. Contact a LendArch expert to discover which tools can improve your loan application submission rates today.
As Chief Executive Officer, Tammy Richards brings over 35 years experience in Mortgage Banking, EClose/EMortgage, Robotics/AI/OCR/ICR implementation and more. She has been an executive and has led Nationally at Bank of America, Caliber Home Loans and most recently served as Chief Operating Officer for Loan Depot. She is passionate about and is an expert in the mortgage industry's ongoing tech transformation.