As guys in the mortgage industry, you and I can agree that .125% of anything is insignificant. When it comes to most things, .5% isn’t much of a dent either. For some reason though, in the banking, and especially mortgage world, a fraction of a percent is a big deal.
Homeowners have been known to brag about the interest rate they got on their home, just like car owners talk about getting a steal at the dealership. It’s like a cock measuring contest. Who can get the lowest rate, fees etc.
Let’s get real. Thanks to TRID, TILA and Dodd Frank, there’s no such thing as a ‘bad’ mortgage loan. You can’t get an inflated rate. Best case, in 2015, you might shave .125-.25% off a rate, if they’re lucky and call 20 banks. Even then, an eighth or quarter of a point isn’t that much money when broken out monthly, over 30 years.
Why do people feel they need to shop around for rates?
They shop because that’s what their parents did. That’s the information they’ve been given. They don’t know any better. It’s your job as a MLO to save them. Save them from spending their time, risking their credit and stressing out over one quarter of one percent of a thirty year note. It’s a dime waiting on a penny.
The banks have always been labeled as greedy and rich. People like the game of beating the bank. It’s like going to Vegas and winning in the casino. Plus, like I said earlier, it’s a measuring contest of male appendages type thing. “I got a better deal than you”
Most loan officers think they need to sell rate and term. Some think they need to sell service and program. The best know they need to solve, not sell.
When someone is buying, selling or refinancing their home, it’s a symptom of a bigger problem. Not all problems are bad. It could be upsizing due to a new baby. Downsizing due to a job loss. Refinancing due to credit card debt or savings goal. The sooner you find out WHY they are contacting you for money, the sooner they stop talking rate.
Rate doesn’t matter if you solve their problem. When people are asking for hundreds of thousands of dollars from a mortgage officer, they have a problem. A big a$$ problem. The sooner you solve that problem and show them you’re the only answer they need to get to that solution, the sooner you one call close them.
First off you’ve got to know this; No one wants a mortgage. In French, mortgage means slavery or something like that. I can assure you this, no one rolls over in the middle of the night and looks at their spouse and says “we need to go into debt for the next 30 years”
They never say that. What they say is that they have a problem, and the mortgage can possibly solve it. It’s your job to find the problem and show them that a mortgage can 100% solve that problem. Sell the solution to the problem, not rate, fees and service. They couldn’t care less if you give good service or not as long as you ease whatever pain they are experiencing with the problem.
I never had an issue with rate shoppers when I was a MLO. I worked for a bank with the highest fees and rates there were. I’d listen to the other LOs talk about how they lost deals over rate or because we are “too expensive” meanwhile, I was doing deals for engineers, Asians and CPAs with no problem and no shopping.
I was able to do this because I sold on problem solving, not rates. I’d even go on to say that 80% of the people I sold loans to never even asked me what the rate was OR if there was some way to get a lower one. They were all so happy and caught up with the fact I was helping them, they overlooked what everyone else stares at.
Being a loan officer is a boring job to the outside world. They have no clue what we do or how it gets done. They don’t care either. They don’t care about you, me, the broker or the underwriter. They care about your direct ability to ease their pain by solving their problem.
I’ve seen a lot of LOs talk their way out of a deal because they explained too much. People have ADHD everywhere. Our diets, phones and computers are stealing our attention span. They don’t want to listen to your boring explanation of how the mortgage process works. They want ONLY the answers to their questions, and their problem gone.
Nest time someone says “what’s your rate?” hit them with “what’s your credit score?” lol! Seriously, next time they ask, simply respond by asking them permission to get some information, then ask questions to uncover the reason they reached out. That will take them off track and into your lock sheet!
If you’re looking to get more buyer leads, close them with ease, keep them from shopping and turn them into raving fans, check out my program for MLOs called Real Estate Ads Academy at www.readsacademy.com You’ll learn how to get leads, all by yourself for as low as $3 each.
If you’re looking to start closing over $3 million in loan production each month and ready to invest in yourself simply fill out the form below and I’ll be in touch with the next steps. Either way, quit bickering over rate and get them talking about their problems.