Over the course of 25 years, I have heard many loan officers express frustration about their rates not being competitive. One of the most common questions from rate shoppers is, “What’s your rate today?” Unfortunately, the focus in the industry has been primarily on rates rather than on what truly benefits the borrower financially.
Many salespeople believe that selling rate is the key to winning deals. However, my experience in mortgage origination has taught me that loan officers succeed not by selling rate, but by educating borrowers on their options and aligning those options with the borrower’s long-term financial goals.
Remember all those ads for “No Points, No Fees” loans? That’s selling, not acting as a Trusted Mortgage Advisor.
So, how do you build trust? Trust is earned through education. By presenting multiple loan options and helping borrowers understand the financial impact of each, you can truly build trust. In my opinion, presenting a single rate is a wasted effort.
To properly educate borrowers, you must first understand their complete situation and the property they are financing. This can be achieved by asking thoughtful questions and following up with more questions.
Let me share a real-life example with you.
Once, I received a call from a rate shopper who claimed to be an investor. His initial question was, “What’s your rate today?” He expressed interest in a no-points, no-fee loan for a home purchase.
Instead of immediately quoting a rate, I responded with, “I have 14 different rates today on just one product.” I then asked him a crucial question, “How long do you plan to own the home?” His response that he intended to keep the home for 30 years, pay it off, and use it for retirement income changed the conversation entirely.
I requested to see the quote he received from another loan officer to provide a comparison and offer additional options. I also invited him to my office for a full financial analysis. He agreed.
After reviewing the options for 15 minutes, he admitted, “I’ve been taken advantage of five times in the last three years.” This realization came after I showed him the long-term benefits of buying down the rate and the significant interest savings over time. He then asked me to review three more loans for potential refinancing.
Ultimately, after 45 minutes, he left my office saving over $200,000 in interest and committed to doing four loans with me. This success was a result of asking the right questions, presenting multiple loan options, and allowing him to make an educated decision.
Building a relationship through conversation and education led to a powerful referral source. To him, I was not just a salesperson pitching a rate; I was a Trusted Mortgage Advisor.
The software I utilized played a crucial role. It provided full transparency, outlining all fees and offering a comprehensive financial analysis, including the return on investment over time.
Success in this process is not solely measured by the loan closing but by whether the borrower would confidently refer their loved ones, knowing they were guided by a trusted professional.
This is the distinction between making a sale and becoming a Trusted Mortgage Advisor.
Randy Senzig is the Founder & CEO of The LANIS Group LLC.
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