Borrowers expect near-instant access to accurate and competitive mortgage rates. Originators who still rely on clunky manual processes need help to keep up. Mortgage product pricing engines (PPEs) are here to meet the challenge with a streamlined, automated way to offer borrowers pricing information.
PPEs allow lenders to compare customized loan offers in seconds.
What is a Product Pricing Engine (PPE)?
A product pricing engine is an integrated tool that calculates loan pricing and rate options based on borrower characteristics. Utilizing a PPE is significantly faster than manual processes; the time it takes for a PPE to generate loan offers is measured in seconds.
For a PPE to accurately determine pricing, it must consider numerous factors, such as the borrower's credit score, loan size, and amount of money down. Other variables, such as market conditions or mortgage type, may also need consideration.
You can offer borrowers competitive loan rates with minimal effort by integrating a PPE into your Loan Origination System (LOS) and Point-of-Sale (POS).
Benefits of using PPE for Loan Originators
PPEs bring rich benefits to lenders and brokers.
Faster Loan Pricing and Approval Process
Originating loans manually is time-consuming due to the number of steps and data points required for accurate pricing. Utilizing a PPE shortens this process by automatically calculating loan offers in seconds, resulting in faster approvals.
Increased Accuracy and Consistency in Loan Pricing
By running pricing through a PPE that considers relevant borrower variables, lenders can ensure they offer accurate and consistent rates—no more digging through multiple outlets for the correct information. Your PPE will make the data readily available on one dashboard.
Enhanced Customer Experience
Manual rate calculations are error-prone and take far too long to complete. Offering borrowers fast and competitive loan rates creates an enhanced customer experience. With the added convenience of a PPE, customers are more likely to stay with your business in future transactions.
Ready to say goodbye to pricing loans the old fashioned way? Discover Sonar's PPE.
Competitive Edge in the Mortgage Industry
Adopting loan pricing software into your business gives you a competitive edge. Your team will be able to respond quickly to market conditions and changing borrower demands, allowing you to compete in the mortgage industry by offering competitive rates.
If you can't offer the exact loan parameters the borrower is looking for, a pricing engine enables you to provide them with the next best thing.
Increased Profitability
Optimized pricing attracts borrowers. A loan pricing engine enables you to give borrowers the best possible rate packages, resulting in a higher volume of loans and, ultimately, increased profitability. Your agents can process the increased volume because the PPE reduces the time to approve and close loans.
Cost Savings
Investing in a PPE reduces your need for human labor, which quickly adds up when considering the costs associated with wages, training, and recruiting. Since features like rate sheets get integrated into the system, a PPE improves operational efficiency and limits expensive errors.
Your PPE can also affect your bottom line by helping you maximize earnings on less popular products.
Revolutionize how you provide pricing for your borrowers. Schedule a demo today.
Critical Components of a PPE
For a PPE to be effective, it needs the right components.
Real-Time Pricing: Real-time pricing keeps your loan offers up-to-date and competitive.
Multiple Investor Pricing: Many borrowers require financing from several different investors. A PPE can help you generate loan offers from various investors in one place, making the process easier and faster for everyone involved.
Product Eligibility Checks: Product eligibility checks automatically verify that a loan meets all requirements for approval. The review prevents compliance mistakes and delays in the loan process.
Automated Pricing Adjustments: As market conditions change, your pricing needs to stay current. Automated pricing adjustments keep rates in line with your competitors.
Rate Lock Options: Rate lock options allow you to use a PPE to guarantee a steady rate from offer to close, drawing in borrowers who want to avoid market fluctuations.
Integrating a PPE with Your LOS and POS
Integrating a PPE with your LOS and POS systems helps move borrowers through your pipeline. The connection between the PPE and POS creates a streamlined application process, with borrowers able to immediately see their loan offers after submitting applications electronically. You can quickly pull the application data as it's fed into your LOS.
Combining a PPE with your LOS and POS also improves accuracy, as information is only pulled from one platform. An integrated system ensures that all submitted data is properly accounted for.
You can adapt your setup to align with your specific business goals, which will induce cost savings. For instance, you can tweak your loan parameters based on specific risk factors and loan-to-value ratios.
Finding the Right PPE
When selecting a PPE, look for the features and capabilities that best meet your needs. Are you working with a limited budget, making price your primary concern? Do you need a PPE with advanced reporting capabilities?
Research the vendors available in the market, review customer reviews, ask which systems current users recommend, and request free trials or demos from shortlisted vendors. Seeing how the PPE operates gives you more information than reading a sales pitch or whitepaper.
Before deciding, determine which systems the PPE can integrate with.
Boost Your Revenue with a Fully Integrated PPE
A PPE allows lenders to increase loan volume and profitability. Integrating a PPE with a LOS and POS system enables you to manage the entire loan process from one place.
Finding the right PPE can help optimize your pricing strategies while minimizing costs associated with manual calculations. And when paired with Sonar’s automated POS and LOS platform, you can further streamline the process and maximize your revenue.
Why not explore the capabilities of a fully integrated mortgage system? With Sonar, you can get started right away.
Secure a brighter future for both your borrowers and your bottom line. Schedule a demo today to discover how Sonar is revolutionizing the origination process.
