One effective strategy for attracting direct-to-consumer business is by promoting rates through rate tables. And it gives consumers a sort of upper hand in their homebuying – or browsing – processes. The tables serve as a snapshot of a company’s best rates and how they compare to others. But a lot goes into rate tables: quality control, advertising, and lead generation.
Adam Stein, managing director of Blue Sky Financial, formerly ran LoanTek, a pricing engine company that specialized in helping connect lenders advertising on rate tables with leads. Stein says that LoanTek drove the back ends of Zillow, LendingTree, and Bankrate before being sold to the latter. But what Stein emphasized is that he created LoanTek for a shopping experience which was in the hands of the consumer and was clear enough for them to understand on their own. “Think of it like how you shop on Amazon,” Stein offered as a comparison. “When you’re shopping for something commoditized, you compare costs from different vendors on the same platform. That’s how rate tables work.”
Gregg Harris, CEO and founder of LenderCity – a self-described lead generator and lending marketplace – also described rate table shopping as the Amazon of the mortgage industry. Harris decided to break away from advertising with Bankrate after 27 years and create his own rate table.
“There were nuances I didn’t like with larger rate tables like inaccuracies and misinformation, especially from the perspective of a lead buyer,” he explained. “Some rate tables were inaccessible because of costs. There’s a high barrier to entry.”
Harris wanted to build his own marketplace to customize the needs of lenders working with him. “Typically, [on other platforms] there is a minimum monthly spend, or you as a lender have to be licensed in multiple states, and you select those specific states to get leads from,” Harris said. “What we offer is to pen up the door for smaller lenders. There’s no minimum monthly spend, and you can set daily budgets and when you hit your budget, you get knocked off the table.”