Finding Your Business’ Loan Origination Soulmate

Is your current Loan Origination Software the One?

When the time comes to decide on an LOS you can really commit to, there are a whole host of factors to consider. The product itself, its support team and its hosting services will all affect the overall compatibility with your needs as a customer. With that in mind, have you met your perfect match?

There are 10 key things to consider when deciding which LOS is the One for your company.

Desperately Seeking Software?

Matchmaking you with your perfect LOS starts with you. The software you need depends on the level of customization and personalization your business requires. There are three different types of LOS providers, each with their own benefits and drawbacks:

Entry Level

An entry level LOS is built with a set level of functionality. This means there is no option for personalization or customization of the LOS. It’s the most basic option, with no added bells and whistles; as a result, this system generally has the fastest implementation time and comes at the lowest price.
Though an entry level LOS can work harmoniously with some businesses, it is worth considering your future objectives and whether an off the shelf loan origination system, particularly a more basic variety, would be able to support them.

Configurable

A configurable LOS is a middle-ground between a standard LOS and a tailor-made option. This type of loan origination system comes with functionality, customization and configurability within set parameters. This tends to provide a good balance of both worlds between value for money and the flexibility of features the LOS can offer.

Tailor-made

With a custom LOS, the product is designed completely around the needs of the individual client. This is the most flexible form of LOS, but it does come at a significantly higher price and increased implementation timeline compared to other systems.

Read more: Build vs Buy

You can streamline the process of finding your company’s LOS match by completing a requirements profile to create the RFIs (or RFPs) to send to vendors.

Another important factor in what loan origination software you invest in is the ease of use. Whilst the user-experience/user-interface (UX/UI) the product provides its users with is an important consideration, you also have to consider your internal resources in making it work.

For example, if a LOS requires a complex user manual, you need to identify if you have the technical capabilities in-house to cope. As with when you purchase a new washing machine, if it requires a devoted operational manual to use it, it‘s probably too complex for the average user to comprehend. We’d recommend sticking with an LOS that can be quickly implemented and intuitively understood by all employees, no fuss.

Glowing References

An LOS vendor with demonstrated experience servicing a variety of clients provides insight into their ability to successfully work with your business and provide a quality product and service. If it’s an option, examine the vendor’s client list to see if they have worked with companies in your industry.

An experienced specialist vendor can and will suggest improvements and best practices drawn from other companies they have worked with. Determining a vendor’s track record should also highlight the states in which the vendor operates, which is important when it comes to complying with regional lending laws and regulations.

It’s always good practice to request references for insight— and your prospective vendor’s experience working with companies similar to your own is no exception.

Pricing

The next step in finding your perfect LOS is to determine your budget against the value you feel the system will provide.

Then, examine pricing models offered by LOS providers. Is the vendor flexible in their pricing? Flexible pricing models give you, as a customer, a better chance at agreeing to a pricing structure that suits your business.

For instance, a vendor that is willing to offer a pay-as-you-go model displays flexibility and trust in working with you. This is also important when thinking about your company’s future goals and growth. You want an LOS provider with the ability to grow with you over time— not just in product, but in pricing, too.

Lastly, make sure you understand all of the associated additional costs that come with the LOS; these can include an implementation fee, maintenance fee, licensing fees for application storage, 3rd party interfaces, usage, document storage, reporting and more.

Investment in R&D

Technology moves on fast. Top companies keep up-to-date with the latest technological advancements and your choice of loan origination software should be no different. A good LOS vendor will always be investing in their product and improving it over time, with the corresponding effect of supporting you in helping your business to flourish.

Ask to see the company’s product roadmap for their LOS to get a sense of where they plan to go with their product in the future. If you better understand the vendor’s relationships with their product and their existing clients, you’ll at least know what to expect.

Something to focus on specifically is their ability to take feedback from customers and use this to improve their product.

As a customer, your voice should be heard, and your suggestions should play a vital role in future product development. As a forward-thinking representative of your business, it’s also important to work with a provider who is passionate about innovation. It’s worth asking your prospective software vendor what tech trends they feel will affect the industry long-term, what they believe is beyond the roadmap and what common industry interests you both have.

In summary, your software vendor should not just tick your existing requirements – they should also inspire you!

Support & System Availability

When searching for a software vendor, would you prefer a mutual partnership or one where they are happy to take the lead with a hands-on approach?

Businesses often toe the line between what they want and what they can afford; a constraint when it comes to pricing differences in terms of the availability you expect of the vendor’s support services. Are you looking for a dedicated team focused on your implementation through thick and thin, or a more general approach-if-needed resource?

If you’re expecting an LOS with 99.9% uptime, a dedicated support team and weekly releases at your convenience, you can expect a considerably higher cost compared to a product with a general support line, lower uptime and quarterly planned releases.

If you are a global company that has offices around the world, it’s also paramount to ensure you work with a vendor that is able to provide support across all time zones. The last thing you need is to be left treading water with no lifejacket if anything happens to go wrong.

Team

Working with an LOS vendor isn’t just an investment in the product; it’s an investment in the vendor’s team. It’s a team effort to implement a new LOS product, as well as to provide adequate support and guidance on its use.

Synergy between teams will make for a smooth-sailing experience all around, as well as prompting a better outcome. Consider having some exploratory meetings with your vendor to meet the team that would be working on your implementation— not just the friendly sales people!

Communication

Absence doesn’t make the heart grow fonder: you want to find a vendor that responds to your inquiries in a timely fashion and goes out of their way to keep you informed of new product updates, fixes and product-related news.

Make sure you don’t get stuck with an LOS vendor who forgets about you immediately after you begin using their product.

Compliance

One of the most appealing reasons to use an LOS is its ability to automate many processes, especially ones that can automate regulation compliance. Look for an LOS that has compliance workflows built into the platform, as well as one that can provide full audit trails to meet regulatory standards.

Your LOS vendor should be up-to-date with your locality’s most recent regulations and be able to directly integrate them into the system, saving you the time and effort.

Hosting

The LOS should have a flexible hosting model that works with your needs – whether you require Licensed/On-Premised, Private Managed/Dedicated hosting, or cloud-based hosting.

Each model has its own set of complexities, so take the time to research what hosting options your LOS provider offers and confirm they have experience in implementing your preferred model.

Asking the right questions upfront will save you setbacks later.

LOS at first sight?

As a first step, it’s always a good idea to create a list of the LOS components you want so that you can easily rule out vendors who really don’t fit the bill. You can even rank each category in order of importance to give yourself a sense of the things that you value highest in an LOS, just in case it does come to a compromise.

Once you can find a marriage of your ideal LOS components and provider requirements, you’ll have the makings of your perfect LOS— and a vendor relationship built to last.

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