Partner guest blog: Borrowers want to renovate, are you ready to support them?
By: Land Gorilla, An ICE Mortgage Technology Partner
In our Partner guest blog series, ICE Mortgage Technology™ Partners who achieve Silver level have the opportunity to share a blog on our website that explores a hot mortgage industry topic, and details their Encompass® integration. Keep a look out for more guest blogs from our valued Partners!
How offering home improvement financing in any mortgage will better serve your customers
In many markets, the best options for an entry level buyer or a move-up buyer is within the existing inventory which, on average, is 40+ years old. These properties could have some renovations in their history, but likely would need some updates and improvements from the new buyers. The work from home lifestyle, the desire for green efficiencies, and just a general refresh are a few reasons that buyers will want to renovate.
The largest home buying group are Millennials, and they are taking part in the current renovation craze. In 2021, 56% of millennial buyers purchased homes that required renovations, and in that regard, they are spending a lot. Nearly 70% of millennial home buyers have a renovation budget or $25,000 or more, and close to half of them say they’ll spend $50,000 or more to improve their homes.1
There is opportunity for lenders to provide loan products to help support this trend, and Land Gorilla’s integration with Encompass® by ICE Mortgage Technology™ is directly suited to support your success in renovation lending.
Renovation loans are sometimes perceived as slow, complicated, and risky to your mortgage pull through rate. But renovation products open a world of options for buyers to renovate, and for lenders to generate more business and profit. Supported by the best technology, renovation loans can be frictionless for borrowers and lenders, delivering the right product to the right customer at the right time.
Traditionally, for a borrower to finance a renovation, they are left with options like credit cards, HELOCs and cash-out financing. Some options rely on home equity, which often isn’t available in a first-time purchase. Many renovation loan products offer low down payments and an LTV as high as 97% based on the property’s worth after improvements. These programs can provide ample resources for your borrowers to finance repairs, upgrades, and better energy efficiency.
A frictionless process with the right technology
Renovation loans do not need to be complicated or risky. Land Gorilla’s integration with Encompass provides an end-to-end technology solution to facilitate a seamless renovation loan process. Multiple loan programs are supported across these leading platforms, such as FHA 203(k) Standard and Limited, Fannie Mae Homestyle, and Freddie Mac CHOICERenovation. Portfolio loans, VA, USDA, and escrow holdbacks are also supported.
At closing, loans can be passed to the Land Gorilla platform with ease through a simple turnkey integration with Encompass. During the renovation process, Land Gorilla technology enables information to be shared and exchanged by connecting borrowers, contractors, and lenders to manage from one centralized budget of record. Lenders can provide a unique, branded experience for their borrowers with improved communication, fast inspections, and streamlined draw disbursements.
One mutual Land Gorilla and ICE Mortgage Technology client says, “This integration provides a complete end-to-end solution that eliminates manual entry and saves time throughout the loan process. Land Gorilla gave us immediate satisfaction with being able to have visibility on the project and know the status at all times.”
With technology supporting your process, renovation loans no longer need to be slow or risky. You can better meet your borrowers’ needs by empowering them to make a house their dream home, while generating more business, and saving more deals in your pipeline.
To learn more about this technology and read additional lender reviews, visit Land Gorilla on the Marketplace by ICE Mortgage Technology™.