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What are the legal boundaries for consumer-direct marketing?

Jul 19, 2005

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].
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Jul 19, 2005
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