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   ARTICLE   |   From Scotsman Guide Residential Edition   |   November 2007

Answer Rate Questions Confidently

Know how to field three of borrowers’ most-frequent concerns

As a mortgage broker, your job is all about serving your borrowers. You meet them, help them with applications and find them a loan. Throughout the process, you answer their questions.

Although you can’t be prepared for every question that clients ask, it pays to have a practiced response for common questions. Your clients will appreciate and respect quick and confident answers on your part — anything is better than an uncomfortable silence or a babbling ramble. Here are three questions borrowers ask regularly and the answers you can use to keep the conversation in your control:

1. What do the rates look like today?

 

Feel free to tell potential borrowers that this is a question you are asked frequently, but make sure they understand that there is no easy answer. You might liken it to asking what the weather is like in the United States — one answer doesn’t fit all. This is a general question that requires more specifics to be answered properly.

Tell them that many factors play a role in determining an interest rate. These factors include their credit score, debt and income. You can share with them that day’s potential rate for a borrower that has qualified for a conforming loan. But remind clients you must analyze their particular situation before you can be sure of the rate they will receive.

2. I got an ad in the mail for a loan with a 1-percent interest rate. Is this possible?

If asked this question, brokers should clarify to borrowers how these offers work and why they should be avoided.

Start out by acknowledging that these loans do exist with option ARMs. Then explain that the actual interest rate is closer to 8 percent, and when borrowers choose to pay only 1 percent, the other 7 percent is added to the principal — therefore increasing what they owe. This is a negative-amortization situation.

By giving potential borrowers the details about widely-advertised loans, you will likely debunk the loans’ appeal. You should be able to move on to discussions about more-reasonable options.

3. I saw an unbelievably low rate on a television commercial. Can you beat it?

This one is easy. Remind these potential borrowers about the fine-print disclaimers that run at the bottom of those ads. If you look closely, the lenders offering these teaser rates are also charging higher origination fees and upfront closing costs. The lesson for your clients is this: Low interest rates usually mean a lender is making up the money in some other part of the loan process.

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Be prepared to answer these and other rate-related questions when you are speaking with clients. Get in the habit of responding immediately. It doesn’t hurt to answer with a question of your own. Asking clients about where they heard or saw these unbelievable deals may lead them to think more about the feasibility of the teaser rates. It also can put you back in control of the conversation.

Keeping the discussion in your court is crucial. If you pause, start over or stammer during your explanation, potential borrowers may lose confidence in you and perhaps shop elsewhere. The faster and more authoritative you can be with your responses, the more you will sound like an expert — and the more likely borrowers will stick with you. 


 


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