Mortgage app development is a lucrative business domain, yet, if you plan on entering a digital mortgage business, there’s a number of important nuances you should be taking into account. In this article, we will talk about things to consider when building digital mortgage solutions. If you’re contemplating developing a mortgage app, read on.
Important Aspects of Mortgage App Development
Below is a list of things you should by no means overlook if you’re about to enter the digital mortgage business:
The mortgage industry is subject to a number of laws and regulations, in the United States and worldwide. In the US, it is regulated by the federal government, specifically, by the Truth in Lending Act, and Regulation Z. Both are meant to protect customers and are obliging lenders to provide them with correct and transparent information about their purchases. Customers should be able to compare offerings of different lenders and make informed decisions.
Legal aspects
Another integral part of the US mortgage regulation is the Real Estate Settlement Procedures Act which aims to inform customers about the complete costs of real estate objects they are about to buy. Lenders are also obliged to provide borrowers with complete information on the type of business relationships between the lender and all parties connected to the settlement process.
International laws
Local mortgage regulations will differ depending on the country where your lending business will operate. To comply with these regulations, it’s highly advisable that you hire a lawyer to help you deal with the intricacies of local and state laws in any specific area.
Financial aspects
Mortgage lending is closely tied to a number of financial risks that you should be aware of. Consider hiring a qualified expert in finances, experienced in working in the credit and banking sector to consult you about the financial risks and ways of avoiding them.
Loan agreement
After having considered all the legal and financial aspects, you are finally ready to draft a loan agreement between you and your customers. The agreement should clearly state all the loan terms and conditions and be offered to customers before they become borrowers. Have your lawyers and financial specialists help you in drafting this important document.
Bank partner
Forge a partnership with a reliable bank where you will store money from investors and borrowers. Established banks already have regulatory compliance procedures in place, and will help you ensure compliance with your financial products. You can also partner with several banks, if you want to, in order to gain more benefits.
Security
If you’re building a mortgage app, it has to be 100% secure. The common types of threats that you should do your best to avoid include:
– Disclosure of sensitive data
– SQL injections
– Cross-site scripting
– Unauthorized access
To provide top-notch security, make sure to introduce advanced data encryption techniques. Two-factor authentication is also a must if you’re building a mortgage app. The trend in modern app development lies in using biometric authentication, face and voice recognition technologies.
Data protection
Apart from financial and legal regulations, your app should comply with data protection laws. If you plan to operate on the EU market, make sure your app is GDPR compliant. All digital businesses in California should follow the California Consumer Protection Act (CCPA) which serves to protect the users’ personal data. All in all, it’s always a good idea to learn about the data protection laws in areas where your mortgage app will operate.
App support and upgrade
Once your mortgage app is built, it needs constant technical support and regular upgrades. Make sure your technology partner is ready to provide them and is dedicated to your application support and maintenance.
Development costs
Last, but not least, you need to consider your development budget. Surely, the price will depend on the overall complexity of your app, the tech stack, and the features you will need to introduce. The more complex your app functionality is, the more hours it will take to create it, which will impact the development price. If your application tech stack requires technologies like cryptocurrency and smart contracts, machine learning and big data, the price of building your app may be significantly higher.
Final Thoughts
Mortgages are an integral part of the economy, and governments across the world are obliging lenders to follow rules that ensure they treat all borrowers equally and provide them with all the necessary information for making decisions. If you’re new to mortgage app development, you will need to consult legal and financial experts to ensure compliance and meet all the standards imposed by your local authorities. Needless to say, the tech partner you choose should have proven expertise in building fintech apps.
At VARTEQ, we are proficient in building software applications for a wide range of industries, including fintech. If you need to build a custom mortgage app from scratch, contact us now for a free consultation.