Is Limited English Proficiency Causing Your Borrowers to Abandon the Mortgage Process?
For Spanish speakers, limited English proficiency (LEP) often poses a challenge to homeownership. This factor serves as a barrier from the beginning, with many Hispanic Americans encountering challenges while applying for a mortgage loan and in securing the correct documentation and information to bolster their application. Despite this major impediment, many don’t receive the support they need, causing some to consider abandoning the process.
Lack of resources
Within the mortgage process, struggles related to LEP are common for native Spanish speakers. According to our 2023 Hispanic American Borrower Report, nearly a quarter (23%) said language acted as an impediment in the mortgage process, with over half (51%) of that segment needing to hire a professional translator at an additional cost and 38% unable to find Spanish-speaking lenders in their region.
“Hispanics will soon be one of the largest segments of homebuyers in our country. Mortgage providers can do more to support Hispanic first-time buyers on their journey to homeownership.” said John Paasonen, Co-founder and CEO of Maxwell. “Faced with low volume and increased competition for borrowers, mortgage lenders who offer a more inclusive mortgage experience and wider range of loans that meet the financial realities of today’s borrowers will be able to grow their market share and empower a new generation of homeowners.”
Those who went through the application process reported scant resources available. For instance, only 17% said they received translation services from their lender during the application process. As a result, these borrowers faced extended timelines, with 24% taking three weeks or longer to fill out the mortgage application.
Process abandonment
Despite 76% of respondents saying their current lender has shown cultural empathy, 31% still considered abandoning the mortgage process. The most common reasons for possible abandonment ranged from documentation requirements to general lack of guidance, including:
- Process was too confusing (33%)
- Couldn’t get necessary paperwork (46%)
- Lender didn’t provide enough support (49%)
Like borrowers in general, Hispanic American home buyers are often deterred by convoluted processes and criteria related to the mortgage process. LEP simply veils transparency further. In the absence of customized support, these borrowers face additional barriers to entry that could be alleviated by dedicated resources.
How to become a go-to resource for Hispanic home buyers
To meet Hispanic home buyer needs, local lenders need to invest in point-of-sale technology that automates tedious borrower tasks and frees lending teams up to better support customers. Maxwell Point of Sale, for instance, leverages features like QuickApply™, which autocompletes required fields when borrowers input their zip code and the last four digits of their social security number, making filling out the loan application easy and straightforward. This leads to an over 90% completion rate, removing rote work from lending teams and dramatically simplifying the application process for the borrower, including those with LEP.
Additionally, we offer a dedicated Spanish language loan app, which provides an easy-to-use, intuitive interface for Hispanic borrowers. Unlike many existing point-of-sale systems, which rely on translation through a Spanish-speaking representative or only offer a Spanish landing page or subtitles in the loan application, our loan app provides an immersive Spanish language experience. Built with input from our in-house group of Hispanic American processors and underwriters, our Spanish mortgage application strengthens cultural context and retains industry-specific nuance, helping lenders attract, convert, and engage native Spanish speakers.
Download Maxwell’s 2023 Hispanic American Borrower Report
Want to view exclusive data to help shape your strategy to increase homeownership in your community and open relationships with new borrower demographics?
Download our white paper, the 2023 Hispanic Borrower Report, to gain access to:
- Insights that reveal common barriers to entry for native Spanish speakers in the mortgage lending process
- Reasons Hispanic American borrowers choose their lending provider
- Ways to connect with this audience as a lender
- And more!
Get your free copy of the Maxwell 2023 Hispanic American Borrower Report
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