picking the best loan products for your customersGeorge S. Phelpsfinancial advising, customer service
Mortgage brokers who position themselves as financial advisors
for mortgages build and sustain long-lasting relationships.
Providing your customer with sound and valuable advice ensures a
successful future together.
The Talent for Listening
Many salespeople possess the gift of gab but lack the talent for
listening. A former loan officer of mine took it as a personal
challenge to change a customer's choice of loan program if they
hadn't yet met with the "salesman." Since salesmanship was the most
important thing to the loan officer, he would sell the customer on
another program, right or wrong. In turn, the customer would often
decide that they wanted a loan officer who would listen to their
needs.
Your prosperity in this business depends on whether or not you
listen to your customers. Rich Hall of Ace Mortgage Funding in
Indianapolis says that the key to making a solid recommendation is
to listen to your customer. Since his company operates in several
locations, like the West Coast where home values have soared and
incomes are not as high as home values, he recommends the
interest-only programs for more sophisticated borrowers. "This
allows our customers to buy the house they want to live in now, and
as their income rises, they can refinance later with a 30-year,
fixed loan or pay additional to the principal and pay off the loan
sooner," he said. Interest-only programs are currently Ace Mortgage
Fundings' most popular option.
Asking the Right Questions
When John Lowry of Lowry
Mortgage Network in Atlanta sits down with a customer, he tries
to think, "What would I do if I were them?" John says that you have
to ask many questions. Some of his key questions are: What is the
customer's comfort level with payment? How long do they want to be
in the house? Is the customer trying to save money to fix it up?
Are they planning to live there for just a few years? Is this their
final home?
With nearly 100 different programs available, John reiterates
that you can't tell everyone they need a 5/1 adjustable-rate
mortgage or a 30-year, fixed loan. He says it is important to get
the customers to open up and tell you everythingfrom how much they
make and want to put down to the status of their credit and their
predicted duration in the home.
Asking the right questions and listening carefully to their
answers help the broker make good recommendations. In turn, letting
your customers know that you understand their situation creates a
mutual comfort and trust.
John often works with borrowers who have no money to put down.
So, he recommends the 80/20 ARM with the 80 percent first on an
interest-only loan. "Our customers who need 100 percent financing
will generally come out better with an 80/20 loan to avoid PMI
[private mortgage insurance]. If they do have some money to put
down, we still recommend an 80/15," John said.
Narrowing the Choices
When you combine the knowledge you gathered on your customer with
what you already know about the mortgage business, you can verily
recommend certain loan programs to your customer. Often, it is
better to narrow their choices to one to three loan options,
keeping in mind which loans they will qualify for and satisfy their
needs.
Brian Michel of Carolina Federal in
Charleston, S.C. believes that putting customers in the right
mortgage is crucial. With the increase in property values in the
Charleston area, many of his customers don't want to wait two to
three years to get into their house. "I often recommend the
interest-only loan because it allows young professionals just
getting started to get into the house they want without moving two
or three times first," said Brian.
If you listen well, ask the right questions and provide a few
good choices, you will guarantee that the borrower will be happy
with you, and you will ensure plenty of business in the future.
George S. Phelps is chief operating officer of Atlanta-based
Primary Capital
Mortgage. He may be reached at (770) 226-8181 or e-mail
[email protected].
