Mortgage originators serve as important gatekeepers for homebuyers. Not only do they help borrowers acquire what is typically their most valuable asset (both emotionally and fiscally), they also must guide borrowers on the pathway toward what is likely their riskiest liability: the mortgage to finance their home.
Although some of today’s borrowers are choosing to pay off their mortgages early and some may elect to take out shorter-term loans, a mortgage is still likely to follow a borrower throughout the majority of their adult life. Mortgage originators tend to focus on promoting the positive benefits of owning a home, but it’s just as important for them to walk borrowers through the potential pitfalls and dangers — especially those who are first-time buyers or those who may not be in a strong financial position.
Borrowers want to work with an originator who is more to them than just a salesperson. In today’s housing market, originators need to go well beyond the traditional approach of solely competing with other regional lenders based on interest rates. Instead, they must adopt the heart of a teacher and guide borrowers through the mortgage process, setting expectations early and building trust by understanding the borrower’s needs and how a home fits within their long-term financial plans.
As a result of the subprime mortgage crisis, mortgage originators and the lenders they work with often still suffer from the unfortunate stigma of looking out for their own bottom line, not that of their borrowers. As an originator, it’s time to do your part to change that perception by walking borrowers through the wide variety of options available to them, rather than pigeon-holing them into loans that may not be the best fit.
Although mortgage originators may not have the same fiduciary responsibility to their clients as financial advisors or consultants, they should embrace the idea of helping borrowers make informed, well-developed financial decisions with their home purchase. Originators can do so by adopting a perspective of fiscal responsibility on behalf of their borrowers — one that’s designed to help them make the best financial decision possible.
Borrowers today come from a wide variety of backgrounds and financial positions. One of the most frequent conversations for homebuyers revolves around “how much home” they can truly afford. This line of thought does not usually help borrowers make the most well-informed financial decisions, however.
Fortunately for originators, lenders and borrowers alike, there’s no “one-size-fits-all” mortgage. The 30-year fixed-rate loan has remained the industry standard for many years, but that does not mean it will be a good fit for every borrower, or even for repeat clients. There are a wide variety of loan programs out there, each with the potential to help borrowers pay down their mortgage quicker or, at the very least, allow them to live a more financially stable life.
Keep in mind as well that borrowers themselves have access to more information about the mortgage process, and the mortgage professionals they work with, than ever before. Simply touting a lender’s weekly or daily interest rates as “the lowest around” is not enough to engage borrowers and build a lifelong relationship. Today’s borrowers will instead look to work with originators who reflect their financial interests and goals through the guidance they offer.
Mortgage originators today have the unique opportunity to set themselves apart from the rest of the pack. The industry is shifting from a refinance-driven market to an increasing focus on purchase-loan originations. This is no surprise in a cyclical market such as mortgage finance, but it’s an important consideration for those who may be new to the industry or trying to find their niche.
Whereas refinance markets are largely driven by rates, borrowers in a purchase market select mortgage originators based on the true value they can bring to the table with each transaction. This goes well beyond interest rates and toward the relationships that an originator has with clients, lenders, real estate agents, other partners and their communities.
Not only do borrowers want to work with a mortgage originator who understands them, they also want an originator who is capable of guiding them through the mortgage process with the heart of a teacher. This is a phrase that represents much more than acting as a salesperson trying to market one’s loans. It means serving as a trusted adviser, mentor and coach — someone the borrower can engage with on a personal level to discuss their most intimate financial concerns.
Of course, even though originators want all of their potential clients to close a loan with them, this cannot — and should not — always be the case. When an originator adopts the heart of a teacher, it also means having tough conversations with clients that may lead them to another, better-suited option or to no mortgage at all. Some borrowers are simply not financially equipped to take on a mortgage, or are in the market for a specific type of loan, and it’s the mortgage originator’s responsibility to inform them of such considerations.
Although it’s always difficult to turn down a client or send them elsewhere, it has numerous benefits for originators in the long run. As much as borrowers want to work with a mortgage originator who brings real, tangible value to the table, they also want the originator to be truthful, honest and forthcoming in their business dealings.
A potential borrower may not be ready for a mortgage at the present moment, but this is unlikely to remain the case in the future. By providing responsible, sound advice early in the relationship, originators set themselves up for long-term success through repeat business, referrals and better relations with their community.
Just as it’s important for mortgage originators to engage borrowers with the heart of a teacher, it’s also important for them to recognize the importance of philanthropy and giving back to the people they serve. This is a critical foundation of success for any originator because potential clients want to work with people and organizations that take on social responsibility for causes that have meaning to them as well.
Whether this charity is in the form of public workshops, donations to nonprofit organizations, food drives or partnerships, every little bit helps. Most importantly, it all has the ability to change a life — the ultimate goal of all philanthropy.
Banks have for years capitalized on this strategy, promoting themselves as cornerstones of their local communities. It’s time for originators and all the lenders they work with to recognize the role they play as well and strive to do more. This commitment to philanthropy should not come across as solely a public-relations initiative, however. Such tactics are clearly apparent to clients and can actually hurt a brand if viewed as disingenuous. When done correctly —and with honest intent — these charitable efforts can yield significant benefits for originators and lenders alike, as well as for the communities in which they operate.
Employees also are critical to a mortgage company’s philanthropic efforts. They serve as stewards of the company’s relationship with its local community. In order to engage employees in this effort, however, they must be treated with care and respect.
Mortgage originators who understand — and believe in — their employer’s commitment to personal success will treat clients well. Those clients, in turn, will return that same consideration. Of course, mortgage companies should not do this to the exclusion of being a profitable business, but when such action is taken, the circle is able to continue and profits tend to take care of themselves.
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Today’s mortgage market may be one of the most competitive in terms of engaging borrowers and driving business. At the same time, borrowers are more educated, prepared and fiscally responsible when compared to previous generations, and mortgage originators and lenders alike must recognize that they require much more than a competitive interest rate.
Borrowers want to work with mortgage originators who truly care for their personal well-being, understand their needs and will help them make the best decision possible to achieve the American dream of homeownership.