Why Borrowers Choose Their Lender
It’s important to understand why borrowers decide to go with you as their lender instead of one of your competitors. It would be nice if every possible lead was from a past client, or a friend, family or co-worker, but working with today’s client still requires building trust through knowledge and follow-up to increase your conversion ratio. There are the four main reasons why customers decide who will be their lender.
The lender did more than any of the others. By asking well thought out probing questions such as how long they expect to live in the property, explaining maximum tax benefits, eliminating debt, providing a number of good faith estimates showing loan origination fees versus no origination fee will give the client the opportunity to do make decisions in their overall finances and mortgage needs.
The lender they chose did more to lower their total costs and improved their overall monthly cash flow.
Explain and assist your client in redoing their W-4 form. By raising the amount of exemptions, the client could have less tax taken out and thus improve their monthly cash flow. Take the time to understand tax brackets—don’t guess or overstate tax brackets. This is an opportunity to incorporate a Professional Referral Source CPA to assist your client. Also share what the impact of making one extra monthly payment will do in the reduction of their principle balance. Become the lender that borrowers will say, “The other lender I talked to never told me about these tips”.
The lender they choose did more than anyone else to make my life and the experience easier. By using a “Page 6” or as we call it, “Mortgage Planning and Client Expectation” ask questions such as: “How can we make this transaction simple, easy and enjoyable for you?” Another question would be: “How often do you want us to contact you about the status of your loan?” If you don’t ask questions, how do you know if you are meeting your clients’ needs?
The lender chosen did everything they could to get the best possible rate and term. It’s important for you, the lender, to explain the bond market and economic reports that can affect interest rates, the dangers of floating and the security of locking in rates. No one has a crystal ball about the future. Thousands of clients could have closed at the lowest rates in decades, only to lose because the loan officer was gambling, not keeping their eye on interest rate trends or betting for a better price to make a larger commission. Explain the importance in locking in, in a low interest rate environment. The difference in saving an extra eighth of a percent is about three latte’s a month or a third of a cable bill. If the client decides to float, make sure they understand the rules and the communication that will be needed—even if it is daily to stay on top of the ever changing market.
Purchasing a home is probably the largest financial decision clients will make. It is important for them to have trust and understanding in their lender in order for them to make the most appropriate decisions for themselves. The lender has a responsibility to guide the client through that process, providing them with information and education. As a result, your client will successfully purchase the home of their dreams and come away with a “good” experience in home buying. Their good experience will result in leads, referrals and repeat business.
Positioning yourself as the most knowledgable and trusted mortgage provider in your area enables you to be the “least risk” alternative for your clients. Risk is the strongest and most influential driver of customer behavior in our industry. Position yourself as the best lender in your area in understanding the customer’s needs, providing the most thorough solutions, have the easiest applications, utilize processing and closing systems that are customer friendly and you will see your business climb to greater heights of success.
Tom Ninness is Vice President/Regional Production Manager for Cherry Creek Mortgage in Denver, CO. He is also the President of Summit Champions, Inc. and creator of the “The 90 Day Journey to Your Sales Success”, a powerful 90 day action plan for the sales professional. To learn more about The Journey and Summit Champions, go to www.summitchampions.com
or contact Tom at email@example.com Office: 303-840-0753