In a world where everyone expects instant gratification, it is no surprise that people are turning to mobile apps and online mortgage programs to gain immediate approval – potentially at a lower cost. Lenders who primarily focused on refinance business will not be able to compete in this market without having a solid purchase market share. Your talent will help you shine as a community lender, but that alone may not be enough to win borrowers over in this competitive purchase market.
You should focus on what differentiates you from others. Despite how talented and well known you may be within the mortgage industry, you will still have potential clients that shop around before deciding who to work with. If you are not able to offer the lowest prices to clients, what can you offer that will set you apart and allow you to remain competitive?
Advantages of a Community Lender
You have several advantages over the online mortgage companies of the world. You have flexibility when it comes to tailoring loan programs to fit the needs of your clients. You are also there for your clients – they can put a face to the name and have a trusted point of contact when any questions arise during the mortgage process. You are also armed with extensive knowledge that can help potential clients forge a path to homeownership if they are facing adversity. Below, we will highlight three specific areas that allow you to gain a competitive edge in the mortgage industry.
1. Lending Support
People may desire instant gratification, but when it comes to obtaining a mortgage, that may not be the best route. After all, buying a home is one of the biggest investments many individuals will make in their life, and because of that, potential buyers may be uncertain about the home buying process. You have the ability to be their support system and walk them through every step to ensure they are comfortable – which likely cannot be said of online lending programs.
2. Providing Education
Show potential clients the advantages of working with you – a real person – rather than with just a computer. The fact that potential clients can come to you and have all of their questions answered face-to-face is significant and can certainly set you apart as a loan officer. It is a good idea to have a method in place for qualifying potential clients before they go through the mortgage application process – this will help them understand up front what is required of them in order to obtain a home loan.
3. Offering a Diverse Portfolio
You can do something many online lending institutions cannot: offer a diverse portfolio that meets the needs of a broad spectrum of homebuyers. Mortgages are not one size fits all, and you have the ability to tailor loan programs for your clients. Often, online lenders will have a limited number of mortgage options from which potential buyers can choose, and there is a chance they may be denied if one or more requirements are not met. Along these lines, you can shine by serving the underserved – those who may not believe they can buy a home because of their financial background. Many people are not aware of the low- to no-down payment options out there, but you have the ability to offer such mortgages to meet diverse needs. Additionally, as a vault lender you can refinance existing debt whether as a car loan or as a credit card to help provide a lower debt-to-income ratio.
Using Your Competitive Advantages Strategically
Though you may not be the low-cost leader, the competitive advantages mentioned above can set you apart from the rest. But, how can you use these in your daily operations to drive awareness to your mortgage business?
1. Digital Marketing
In order to outpace the competition, you need to continually improve your digital strategy. In this information age, people want instant answers and want to find them seamlessly. It is important to have a high quality, easy to navigate website that provides enough information to draw them in. Avoid getting too specific, as you want to prevent information overload – and you want them to have a reason to get in touch with you!
Social media is an essential part of a good marketing strategy, but you will want to be strategic in your approach. Not all social media platforms make sense for all businesses – you should focus on the ones where your audience prefers to engage and spend your time there. You can determine this by reviewing demographic information for your target audience and comparing it to current social media trends and data. If you are trying to reach Millennials, you may find success using Instagram to connect with and educate potential buyers as 59% of Instagram users are between the ages of 18-29. On the other hand, if you are targeting a more broad audience in terms of age and income, Facebook is a safe bet, as 68% of US adults use the platform regularly.
One huge benefit to take advantage of: you have a physical location where potential clients can stop in and discuss their mortgage needs. This provides a great opportunity to create and display ads featuring the mortgage solutions you offer and how you can help future homebuyers achieve their dream of homeownership.
You have the advantage of getting face time with clients, so do not miss the opportunity to provide educational tools like credit education classes and low-down payment solutions seminars that can set them up for home buying success. The reality is, people are going to shop around before choosing their lender, but the key is to ensure you are the last one to get shopped. Build a strong and trusting relationship with potential clients that will encourage them to bring other lender estimates to you, which gives you the opportunity to show them why you can provide a better loan program that will meet their current and future needs. Along those lines, be sure to educate your borrowers on rate – and do not just go by what is listed on other lender estimates – show them how it all breaks down and what they would actually pay.
4. Community Outreach
Another touchpoint you have as a brick and mortar mortgage lender is the ability to host events within the community to drive awareness to your brand and showcase your mortgage solutions for potential homebuyers. The opportunities are endless, from occupational events for police or teachers to back to school happenings and more – getting yourself in front of these individuals can lead to significant growth in your client base.
As technology continues to grow, do not let it become your enemy – find ways to successfully compete and use your skills and strengths to gain an advantage within the mortgage industry. Online lending may not be going away, but you have the opportunity to rise above and build a trusting relationship with potential clients that technology simply cannot replace.