- The key to differentiating in the mortgage business is building relationships, focusing on a local niche, finding creative solutions and communicating well.
When it comes to mortgage loans, non-conventional mortgage loans are in a league of their own. Each of these loans is different depending on the goals of the borrower, which means that it can be tailored and changed to fit specific needs. This is one of the reasons they are so desirable. However, this also makes them complicated.
Because they have the ability to develop competitive advantages for their clients, there is plenty of room for competition among mortgage brokers and lenders. So how do you stand out in the crowd?
Obviously speed, proper documentation and experience are the benefits of the business, but there are other selling points that you can offer your clients that other brokers cannot. Here are four crucial items a mortgage broker can offer clients to stand out above the rest of the competition.
A key aspect to loan brokerage is having a relationship with your clients. The client is coming to you with a goal in mind, and he or she needs your help to reach it.
When you get to know your clients and understand their goals, you can help them to effectively reach them. You can strengthen these relationships by being reliable and honest with your clients.
Never overpromise anything that you don’t intend to give them. Of course, you want to sell your product to the client, but you shouldn’t start selling right away.
Learn about your clients and what they are looking for. If you can keep your clients happy, that will lead to more business down the road.
The reason there are many brokers who do not put in any effort into building these relationships is because they don’t have the time to put in the effort. This is because they try to cover too much ground by not staying local and attempting to fund all loan types.
A good broker stays local and focuses on certain kind of loans. You’re just wasting the borrower’s time if you tell them that you can finance any loan under the sun.
Find a niche, and build your business on that niche. Don’t be the kind of broker who tries to market to everyone, you won’t get very far if you do.
Another way to provide a competitive advantage is to defer as many payments and costs as you can until the property is sold. Word of advice: cash flow.
You want your borrower to buy the property at a low cost so you’re protected in the event of an unforeseen issue. This is also where time and effort comes into play.
Developing the right lending criteria for each borrower takes time and creativity. You’ll need to think outside the box to offer a loan with the kinds of terms that benefit you and the borrower.
This goes hand in hand with relationships because communication is a two-way street. The borrower should not be kept in the dark when it comes to their loan, and they should understand the terms, conditions, interest rates, repayment plan, etc.
Even if everything is planned out, things can still go wrong. You will need to be able to communicate with your client in the event of an unanticipated problem.
The clients will feel comfortable working with you when they know that you have their best interests in mind.
The more you understand and listen to your borrower, the easier it will be to close the loan. The goal is not to trick the borrower into getting a loan that benefits you, but instead, working with the borrower to work out a loan that works for all parties involved.
This may take time and patience, but these are two more qualities that the borrower will have difficulty finding elsewhere.