As mortgage originators greet 2016, the biggest concern for many is how to grow their business in a challenging environment. Although the market for purchase originations is expected to be about 10% larger than in 2015, according to the Mortgage Bankers Association, interest rates are rising and potential homebuyers are still anxious about taking on a mortgage in the aftermath of the Great Recession. Meanwhile, competition for this business will be keen.
How can lenders differentiate themselves, compete successfully and expand their share of new purchase originations in 2016?
Advances in technology and the consumer trends they drive will play an important role in lending success stories this year. Americans have come to expect service that recognizes them as individuals, but is still fast, convenient and easily compared online to alternatives. Lenders must meet and even surpass these expectations to attract and capture purchase business – and stay ahead of their competition.
Aware of their partners’ need for effective business support, Arch Mortgage Insurance Company (Arch MI) recently rolled out Arch MI RateStar, a new risk-based pricing program for mortgage insurance (MI) that leverages the most current developments in automation and personalization to offer a dynamic pricing solution to lenders.
“We’ve built a more sophisticated and efficient way to price MI,” said David Gansberg, president and CEO of Arch MI. “RateStar goes beyond conventional rate sheets, which rely on just a few characteristics, to assess risk on the basis of a broader range of risk factors. The result is that RateStar more precisely matches the cost of MI coverage to the individual loan.
“Being able to price MI more precisely gives lenders a significant competitive edge in the 2016 market and beyond. For eligible borrowers, RateStar can mean more affordable mortgages with lower monthly payments overall. It’s particularly useful in reaching out to Millennials, who will also appreciate how this technology facilitates a personalized evaluation of the risk represented by their individual loan scenarios.”
RateStar also supports lender needs for speed and seamlessness. It’s available on most industry loan origination systems and pricing platforms, as well as on Arch MI’s website and mobile app. “Arch MI customers enter specified loan characteristics and obtain a premium rate quote instantly,” Gansberg explained. “They can save, share or print the quote for future reference and view comparisons to pick the option that works best for the borrower.” Provided that the loan and borrower information submitted does not change, Arch MI guarantees the RateStar Final Quote for 90 days except where prevented by law, which helps to protect the lender’s pipeline.
“In 2016, being able to differentiate their business is crucial for loan originators,” Gansberg said. “With RateStar, they’ll be able to price MI premium more dynamically and more precisely, utilizing the latest technology, rather than depending on the fixed assumptions of a static rate sheet. For many eligible borrowers, this could mean potential savings. Lenders that adopt RateStar are making the best choice on behalf of their customers – and ensuring their own competitive advantage in an expanding market.”
Learn more about RateStar by visiting archmi.com/RateStar.