The end of last week capped off the highest mortgage rates that the country has seen in over a year. In just shy of a week buyers watched rates jump from 3.5% to 4.125% which has caused some home buyers to back out of deals entirely. Homebuyers that are teetering on the fence have recently found that the rise in monthly payments raises too many red flags to continue with the life changing purchase. The percentage is equal to about $50 more per month on average which will not only raise red flags with potential home buyers but also disqualify them from the debt-to-income ratio that is required by lenders. There are some ways that lenders can adapt their demeanor and marketing strategies to continue closing deals despite what will surely be a continual climb for mortgage rates.
Remain Accessible and Honest
Something that all mortgage professionals can agree on is that lower-range clients are the ones that are beginning to act frantic from rising rates. We’ve covered before that new home buyers are generally looking for a mortgage officer that will help them through the somewhat confusing and nuanced process, that is the reality now more than ever. Loan officers that have not reported back any change in their ability to close sales during the current rise in rates are those that have presented a completely transparent front to potential buyers.
Be hands on and do the math for lower range clients, tell them the exact amount in dollars that the monthly payment will change based on mortgage rates. Also don’t sugar coat the market for potential buyers, let them know that maybe looking a bit below their current budget will help them to afford their prospective home despite any future mortgage rate hikes. Another good piece of advice for buyers is to use ample veils of discretion before considering signing the papers, this is a market where we should do ample research before buying a new or used home. Last but certainly not least advise that potential home buyers have a private contractor come in and review the home before purchasing to ensure that it’s well made and not going to turn into a financial hole in a world where mortgage rates get more and more expensive.
Focus on Marketing
Although higher rates might deter potential buyers and make lenders feel as if the leads have run dry, a slower season simply frees up the office to fine tune each aspect of marketing. Start scheduling blog posts that will drive more web traffic into our site from search engines and then distribute these posts throughout social media. Just because the market isn’t conducive to sales doesn’t mean that people aren’t interested, building trust in social media outlets and the blogosphere is one of the more effective ways to generate leads in the mortgage industry. Equally as valuable is an email marketing program that utilizes email newsletters to engage new potential home buyers or refinancers. There’s always something to do for small offices when it comes to marketing, so don’t waste down time.
Applying these two strategies now can help once Trump takes office and we see exactly how the President-elect will affect the sector. Until December all we can do is maintain and build onto the solid foundation that we present with our mortgage firm and hope that our hard work battening down the hatches pays off in the long term. Transparent officers with a foundation of useful knowledge about the mortgage and finance sector will lead to success, especially when backed by the right marketing initiative.