The digital mortgage process is faster than a traditional mortgage because it cuts out the middleman and eliminates one layer of commissions. It also places a heavier burden on the home buyer in terms of legwork. For homebuyers who are willing to get their hands dirty, this means lower interest rates.

Most of RateCloud’s digital mortgage activity involves refinancings for people who already own a home. These individuals tend to be in their early-to-mid 30s up to about 55 years old.

Homebuyers who are older might need more handholding than the online mortgage process provides, but younger generations are likely to find that they are missing out if they’re not going digital when searching for a new home.

Tech-savvy Millennials and Gen Xers probably know more about a digital mortgage than they thought, especially if they’ve already been through the process of a major purchase before, such as buying a car.

They might not know it yet, but they can parlay their knowledge from the auto loan process into a digital mortgage and save money on the interest rate.

Traditional vs. Digital Mortgage Process

Homebuyers will learn that RateCloud is deliberate in their language when they say you can “earn” a lower interest rate. The reason is clear — more demands are placed on the customer with the digital mortgage process.

Traditional mortgage companies adhere to a model with loan officers, so customers do as little as possible and get the white-glove experience. With a digital mortgage lender like RateCloud, the onus is on the customer to:

  • Submit documentation
  • Upload documents
  • Sign documents

They do all of this without talking as much to a loan officer. In exchange for taking that extra leap of faith, homebuyers are rewarded with as much as a 1% lower rate on RateCloud.

When embarking on the homebuying journey, borrowers will find that most lenders have an online application these days. However, that doesn’t mean the product qualifies as a digital mortgage.

Take the auto loan process, for example, which will generally deliver an approval on the spot unless the buyer doesn’t qualify. The point is, you can walk away from the online application knowing if you are on your way to owning a new vehicle.

With most online mortgage applications, there is typically no such thing as submitting an application, getting approved on the spot, and beginning the process to upload the relevant documents.

Most of the time, once you hit the submit button on the application, that’s when the waiting game begins. Not with Ratecloud.

At RateCloud, you complete the entire application, in response to which the digital lender presents you with your most likely interest rate, though there is no guarantee at this stage of the game.

Next, RateCloud will automatically pull the customer’s credit and assess any fees associated with the loan. They will run it through a decision-making engine.

While the application must still be approved by a person later, if the customer passes the muster up to this point, they can expect to receive a preapproval letter on the spot.

Digital Mortgage Tasks

As soon as a borrower gets the preapproval letter, RateCloud will take the customer to a task section. At this stage, the user uploads any additional documents that are required.

For example, let’s say that the homebuyer is divorced. They will need to upload the divorce decree at this stage.

Or let’s say the customer claims to have $100,000 in the bank. Here’s where the borrower will connect their application to their bank account so that RateCloud can automatically pull the bank statements. This process is entirely secure.

RateCloud can also pull tax documents from platforms like Turbo Tax and integrate with payroll systems to validate income and employment. The company can also access payroll stubs and W-2 information.

Thanks to automation, mortgages are not the most complicated things in the world anymore. Technology has made historically challenging and laborious things pretty easy these days.

RateCloud is transparent with applicants. The rate you see is the rate that you will get.

For homebuyers who are looking to purchase a property as an investment, the process is slightly different. You should be prepared to provide further documentation to show that you can either:

  • Afford the home without any rental income, in case push came to shove
  • Be able to prove what rental income you will receive from the property

This information is critical to RateCloud’s decision-making process. It affects the borrower’s debt-to-income ratio, which is the key component in the digital mortgage provider’s formula to determine if someone has the financial strength to buy a property.

Digital Mortgage: Jumping Through Hoops

When you are preparing to apply for a digital mortgage, there are a few hoops you can jump through to bring you closer to the finish line.

For example, have an idea of how much money you will put down on the home. While you don’t have to be married to this amount, it should be a ballpark figure.

If you say you are putting down $10,000, the lender will ask to see an asset statement or bank statement. They will be looking to learn that you have at least that much in your account to cover the down payment and closing costs for the digital mortgage. The amount you put down affects the type of mortgage product you could qualify for.

RateCloud offers several different mortgage products for purchasing or refinancing, the main one of which include:

  • Conventional fixed-rate loans, which could be 10, 15, 20, or 30 year-loans
  • FHA
  • VA loans

Digital Mortgage Standards

Something to keep in mind about the online mortgage process is that the standards are higher, which is a function of the digital nature of the mortgage. By design, there is less room for error.

To qualify on RateCloud, homebuyers should have a minimum credit score of 680. If you don’t, hold off on the digital mortgage process and take steps to improve your credit score.

When choosing the digital mortgage process, you won’t be cut off from human contact entirely. RateCloud’s model is such that customers have the option to speak to a loan officer for any questions they might have, even after hours if needed, which should give homebuyers more confidence to move forward.

If you’re ready to take the first step toward a digital mortgage, RateCloud will be there with you every subsequent step of the way.