If you’re stuck in your ways as a mortgage loan officer, it may be safe to assume that having the lowest interest rates on the market makes you the best. Business is flowing through the doors and life as a broker is pretty easy, right?
Data from a Fiserv study in 2016 confirms that interest rate was once the top deciding factor for borrowers, with 76% of consumers considering it when choosing a lender. Whereas customer service, company reputation and staff knowledge all fell down the list of considerations with only 54%, 49% and 40% taking them into account, respectively.
We can understand then how you may have been led to believe that low interest rates put you ahead of the curve. However, if you’ve not been living underground for the past five years, you will be aware that having the best mortgage rates on the market is simply not enough anymore. With the evolution of internet research, social media and the good old ‘word of mouth’ convention, different factors now play a more prominent role in the selection process.
Why Trust Has Become Important To Borrowers
Homebuyers are taking more time to find and purchase property these days. With the unpredictability of the economy due to market crashes, global pandemics, and even climate change affecting house prices, it’s no wonder future homeowners are being cautious. Regardless of house prices changing, student debts and lack of interest on savings have placed people into a position of inability to buy. As more time is spent on saving a downpayment, more research is conducted to find the most reputable and trustworthy lenders.
Research shows that trust in financial institutions is declining rapidly, dropping to a new low of 8%. The data in this research makes it apparent that general financial knowledge on investing and saving, confidence in financial decision-making, and comfort in retirement planning is also dropping. If consumers can’t understand the market, how can they trust it? And with low trust comes low engagement.
Lenders Building Trust With Borrowers Is Essential
Declining trust, knowledge, and engagement does not mean the end of the lender-borrower relationship, it simply means that approaches and processes need to adapt.
Clear Communication
The most obvious way to fix the knowledge gap and build trust with your consumer is to ensure that all communication is clear. Get rid of jargon-filled documents and guides and tell your buyers what they need to know. If they know exactly what it is they’re signing up for, they’re less likely to get cold feet. It’s much easier to be skeptical of something you do not understand.
Take Time To Understand Your Buyer
When it comes to buying anything, there is no ‘one size fits all’, and this is also true in the mortgage industry. Taking the time to understand your consumer and tailor your products to fit their needs will undoubtedly solidify their trust in your expertise and product. If a customer feels heard, they will buy in. Optimize each step of your buyer journey to build trust along the way.
Company Reputation Is Key in 2021
68% of clients will recommend the services of a company when asked, and a further 93% will read reviews before buying a product or service. You can gather your client’s feedback in the form of surveys, Google My Business ratings and even testimonials. The National Association of Realtors® (NAR) supports the importance of this step in your business process by revealing that homebuyers of all ages are most likely to work with a lender who was referred to them by a friend, neighbor, or relative.
About 85% of consumers find out about businesses through word-of-mouth recommendations.
These statistics should make you aware of how important it is to raise positive brand awareness and build trust with your prospects.
Listen To Your Customers And Evolve
If you find you’re struggling with the reputation of your brand, either by not having much of one or maybe even a bit of a negative one, there is a way to resolve this. The best way forward is to listen. Trust can be built with anyone if you are willing to actually hear what they have to say. If you listen to what your customers are looking for – where you may have fallen short or where you simply didn’t provide something others were offering – you can find where improvements need to be made in order to grow.
Asking clients what you could do better tells them you care. If your dissatisfied customers see that you both care and make an effort to change, they may potentially return to seek your services again, even if the initial collaboration fell short. And this is the point at which your business will really start to thrive.
Are there any other ways you build trust with your customers? Share them in the comments section below.
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