As the dust settles from one of the longest refi booms in the mortgage industry’s history, mortgage lenders are possibly headed for a new treat—one of the strongest purchase markets in years. Alas, not all that glitters is gold.

While most forecasters are projecting record home sales, the challenges lenders face heading into the new year are immense. It’s no wonder that many lenders are taking a second look at their vendors, software providers and other third-party relationships to make sure they have the support they need to have a successful year.

If you find yourself in the same boat, here’s three things to look for. Pay particular attention to the third—it’s probably the most important.

1. High Costs

According to a recent McKinsey & Company article, “Five Trends Reshaping the U.S. Home Mortgage Industry,” most mortgage lenders are struggling with higher costs and longer cycle times, with current per loan costs ranging between $7,000 and $9,000. These costs are likely to rise as purchase loans eclipse refinances in the year ahead. In fact, purchase volume is expected to increase 9% to a record $1.73 trillion, according to the Mortgage Bankers Association.

With tight inventory and multiple-offer scenarios in most housing markets, lenders are already spending more time and money nurturing customers before they’re able to find the right home to buy. According to a recent Redfin report, the supply of homes for sale this past June reached a record low 1.38 million properties, and the median home that was sold in June and July spent a record low 15 days on the market.

As purchase volumes grow, you’re going to need an outsourcing partner with a proven track record of dramatically lowering business costs by taking time-intensive work off your team’s plate. Your partner should be an expert in non-QM loan production as well, which is likely to increase as more self-employed buyers enter the market.

2. Millennials

It’s a fact that Millennials are driving today’s homebuying market. According to the National Association of Realtors, this demographic accounts for 53% of all first-time homebuyers. And Gen Z consumers, who are quickly approaching prime homebuying age, are right behind them. It’s also a fact that younger borrowers prefer a digital mortgage experience, as they do the bulk of their shopping online.

That’s why it’s important to have a partner that specializes in eMortgages, including eSign technology, eNotes, and remote online notarization (RON) so you can provide your customers with a truly digital mortgage experience and the ability to sign disclosures and closing documents electronically—even remotely, if your customers so choose.

3. End-to-end Efficiency

Traditionally, mortgage lenders and servicers thought about outsourcing and technology needs separately. They turned to third-party loan fulfillment providers for operational support and due diligence reviews, and software providers for the technology to power their business.

Today, these lines are blurred, as more third-party companies now offer both services and technology. However, very few offer end-to-end solutions, which means their clients can only trust them to do so much.

The best course is to find a provider that has end-to-end solutions—both operational support and technology—that cover the entire loan lifecycle of your business. Such providers are truly rare, but they do exist and Evolve Mortgage Services is one of them.

At Evolve, we provide a full suite of loan origination, closed loan and third-party review services, and specialize in non-QM loans. Through our SigniaDocuments subsidiary, we also offer the industry’s most advanced loan document engine, a fully compliant library of SMARTDocs, and everything lenders need to implement eNotes, RONs and connectivity to the MERS eRegistry.

As the mortgage market continues to change in 2022, your business needs will inevitably evolve, too. If you’re looking for a trusted partner that provides a single source solution to help you thrive next year and continue to evolve in the years ahead, give us a call at 888-892-1843 or drop us a note at [email protected].