Mortgage companies this year will be forced to work harder than ever to stay competitive. The market is tightening, with rising interest rates stemming refinances and rising prices shrinking the pool of potential home purchases. That means that you need to be faster than everyone else to procure and process loans.
To do that, you will need to develop a plan. If you look at it, there are four essential elements to building a successful mortgage business. You have to have solid marketing, talent at every spot in your organization, a will to work hard and competitive pricing.
Originators who address these areas well will profit this year. Those professionals will excel, overcoming the obstacles on the journey ahead.
Marketing and mindset
Being better starts with your marketing plan. You need to know all about the latest in tech and look for a very strong return on investment to get the most out of your marketing dollars. These two go hand in hand in successfully marketing your business.
Knowing the tech trends is a necessary part of your marketing strategy. While almost everyone uses Twitter, does advertising there help your demographic? How many people on Facebook own a home? Is cost per click for Google Ads lower than Facebook for my keywords?
Being able to see and interpret these numbers is key. Not only will you decrease your cost per lead, you’ll be able to make better-informed decisions about where to spend your marketing dollars.
These data-based decisions also apply to traditional media. Keeping detailed stats on whether leads come in through radio, TV, billboards, or signage, etc., is a great way to maximize the impact of your marketing dollar. If you can determine the difference between a lead that comes in from a billboard and a lead that comes from TV ads, you’re well on your way to maximizing that ad potential.
Building your marketing campaign is important as well. Anticipating what trends will develop nationally will help to determine your advertising budget and expenditures. Spend your money on the upcoming trend, or you’ll always be playing catch-up.
Knowing the technology of the industry is important as well. You don’t necessarily need an app, but your website needs to be mobile-friendly. There are more applications through phones than desktops these days, and more website traffic.
You have to ensure that a customer on his or her phone can use your website properly. Your online app has to send data to your customer-relationship management software and ensure that you never miss out on a detail of a prospective customer. Your processing department and loan officers need constant access to all of this information, so they need to be able to work from home using the same software that they use in the office.
Remember though that not every new technology will help you. For every new piece of tech you love and use, there are 27 terribly designed apps or websites that stop being supported or working at all. Choose carefully. The right tech helps to cut costs.
Once you have the marketing plan down, you need to find the talent. Talented mortgage professionals are not easy to find.
It takes a certain mindset and desire to succeed in this business. Every job requires a different skill set, from loan-application takers and loan officers to closing and post-closing specialists and underwriters, and you need to be able to determine whether they can handle the job.
Big banks are spending their time right now trying to buy up all of the talent in the industry. There’s a reason that they would rather pull in existing loan officers and underwriters than train new ones. They know they have talent and they want those loans. Your sales team is everything, because otherwise you’re out of business.
Connections and cost
Having the talent isn’t enough. You also have to be able to put your nose to the grindstone and be ready to outwork the competition for every deal.
It’s putting in the time to make sure you hit or exceed deadlines for your customers, and that you process your loans quickly, and get paperwork from borrowers as efficiently as possible. It’s staying late to meet with a borrower or going to meet with them if they can’t make it to your office.
Don’t be afraid to continue to contact the borrower after the sale to ask how they like the house or ask them to write you a review. Use these connections when rates drop to ask them about a refinance. Keep in touch and create repeat customers. Prove that your company is the best place for them to get a mortgage because they know you.
When you make a borrower feel special, like they know you and you are in it together, you have developed a relationship that not only leads to them doing a refinance with you, but can lead to referrals. Every referral cuts down your marketing costs per person. If every borrower recommends that one person call you, you have split your cost per lead in half. That’s incentive enough to take care of your borrowers and make them lifetime partners.
They’ll also come back if you offer competitive pricing. A number of local mortgage companies have gone out of business recently, and a lot of it has to do with their pricing models. While you clearly have to build in enough to make the loan worth it for you, are your points and fees pushing you over what a competitor can offer? If you’re too high, you won’t get the loan, no matter how good your customer service or online platform are.
Borrowers are getting smarter and better informed every day. There is so much information available that they can learn about the mortgage process without you. They can shop around and find a lower rate without much effort. You need to keep your rates low enough to keep them from wanting to look.
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If you can conquer these four major challenges, you can build a mortgage business. Make it a priority to work on these aspects of your company every day and you can be successful.