Mortgage approval in 8 minutes? Just getting the paperwork out of the manilla envelopes takes longer than that.
Rocket Mortgage by Quicken Loans now makes it possible to get approval in 8 minutes. Getting there took more than five years — two years of planning and three years when 500 Detroit-based developers, business analysts and QA technicians rebuilt the mortgage application process from the beginning.
Along the way, the process got rid of paper — now the entire process, including signatures, can be done on a smartphone.
The existing mortgage process with its reams of paper and frequent last minutes demands for more, often obscure, documentation is almost comically out of touch with the way consumers research, shop and buy on their mobile phones these days, said Regis Hadiaris, Rocket Mortgage Product Lead for Quicken Loans.
“We set big goals — someone should be able to get approved for a mortgage while they are standing in the home they want to buy, and they should be able to get a refi approval while in line at Starbucks.”
The Rocket Mortgage team mapped the journey of a mortgage applicant and asked people what they were doing, thinking and feeling at each step of the process.
“Then we turned the whole process on its head,” said Hadiaris.
In the typical process, the applicants have to supply information on their income, assets and debts, and the burden of proof is on the applicant. Rocket Mortgage built a platform that uses third party data to collect that information, from income to credit ratings, and it can then determine the best mortgage solution because the applicant’s information has been imported up front.
“Taking all that information into the platform makes it super simple for people to use.” People don’t like typing into tablets, much less smartphones — Rocket Mortgage can populate most of the data and present it to applicants to review.
“Our goal is to have everyone's information on the platform,” said Hadiaris. “We have a network of public and private data sources that is expanding every month and we can match a person to their income and match to their bank and asset accounts,. We support over 95 percent of financial institutions, and the income platform is growing every month,” he added.
“After we get the information we have to look at underwriting guidelines, mortgage products and the rates that are effective that day, and what client told us. Then the system runs it through algorithms and determines the right mortgage.”
Using Rocket Mortgage, buyers can scan though all the mortgages Quicken offers, from 8 years to 30 years, fixed and adjustable, buy-downs with points, and mortgages that fit VA, FHA or Fannie Mae.
“We keep it very simple on the interface,” said Hadiaris. People can see the results change by using two sliders on a phone or tablet.
Eight minutes to approval is the fastest the Rocket Mortgages team has seen, he added.
“People go through at their own speed. The client is in control the whole time. They can move as fast or slow, stop at some point and then come back in and resume.”
The team obsessed a lot on details of the experience to develop a product that can understand clients and recommend the best mortgage for them.
“We did extensive research all over the country, including different types of remote research. We had concepts and working prototypes and then went through a process of iteration. It recommends the best solutions based on everything we know about the client and they can customize the mortgage based on the length of the loan and the rate.”
Quicken Loans is the second largest mortgage lender in the country, after Wells Fargo, and it has been the top ranked mortgage lender by J.D. Power for the last six years in a row. It changed the industry 17 years ago by going to a call center and then Web service rather than requiring applicants to go to a branch for a mortgage.
“We have clients who go all the way through the process online because they choose to, they love it. We have a ton of great feedback and we are constantly adding more features and functionality and we are releasing improvements all the time.”
People with more complicated finances, or those who get stuck at some point online, can reach out to one of Quicken’s licensed mortgage brokers, but many who do that want to go back online to finish the process, he said.
A large share of the Rocket Mortgage users are on mobile devices, he added.
The pieces of the user experience, like the third party data, the solutions and the automated underwriting are done by Rocket Mortgage so the client experience is very simple going through the screens. But under the hood are an extensive set of calculations and algorithms and automated underwriting.
The user can click a button on a smartphone, “but what is happening is an extensive set of checks, and going out to Fannie and FHA, and getting a full mortgage approval so they can lock their interest rate.”
The full process, including property appraisal, can be done in 30 days or less, Hadiaris added, because the firm depends on outside suppliers for title work and appraisals.
“Rocket Mortgage simplifies the largest, most complex and important financial transaction most consumers experience in their lifetime,” said Linglong He, Quicken Loans chief information officer.
