How brokers should handle educated mortgage consumers

Have you heard the saying “anyone can learn anything these days”? Brokers, hopefully you have, because it applies to your mortgage clients. Founder of Khan Academy, Sal Khan, is often found quoting the phrase – and yes, his non-profit also offers a free course on mortgages covering loans, short sale basics, Adjustable-Rate (ARM), balloon payments and more through his non-profit educational organization available to anyone with an internet connection! This kind of open-source economics course is just the tip of an educated-consumer iceberg.

Nonetheless, while the days of bamboozling prospects with complicated jargon may be over, smart brokers can use this to everyone’s advantage. Our industry is saturated with choice, for lenders, brokers, and consumers, all looking to sell, stay smart and snap up a good deal. With so much competition around, wholesale brokers can stand out to today’s educated customers by meeting them where they already are. 

To ensure repeat business, brokers must know how to handle educated mortgage consumers effectively. This means standing out with effective positioning, unmatched customer service and technology. Let’s dive in...

Proving personal expertise 

Having consumers voluntarily doing homework can go in a broker’s favor, and might actually be an essential step of their process. Financial adviser, Kevin Chancellor, says “there is never a downside to having a good financial knowledge foundation prior to, or during, the purchase of a home”. Consumers seeking mortgage brokers today want the in-depth expertise and connections of a professional that will fill in gaps their own research may miss. 

Great brokers are customer advocates, informing consumers of all education levels about the best exclusive rates they have insider access to, in language and formats that are easily understood. With educated buyers, it’s an opportunity to show you provide experience, value and security, over race-to-the-bottom cheapness. 

Elena Loutskina, a professor at the University of Virginia, says that education is the most important thing to protect customers in the mortgage process instead of cost. “Consumers need to invest in understanding the pricing of the mortgage and make sure that fair disclosure regulations apply, meaning they get the information in advance before they get a mortgage,” 

But how can you show the value you offer, over a search engine or course? While a 2021 study by the Milken Institute found that financial literacy levels are stagnant, the internet provides consumers with the opportunity to self-educate on the whole mortgage process. Open-source calculators help buyers compare rates and research market trends in the industry and there are several courses and education videos online. So brokers need to prove they have specialist tools in their arsenal – leveraging technology like ReadyPrice (which is free for brokers to use) is a formidable head start.

Rising above

According to Michael Brenning, the President of AmeriSave Wholesale Mortgage Solutions, the “broker has the secret weapon…choice”. Paired with expertise, it’s a killer combo. Brokers can shop for different, often unadvertised rates among lenders they’ve fostered relationships with, and select one which will benefit their customer the most. This makes wholesale brokers well-placed to provide an educated consumer with information beyond what they can seek out themselves. It reduces choice overwhelm for the buyer and simplifies the process.

An educated consumer has done their market research; they understand the basic terms of mortgage lending and may have already shopped around for the best rate. This type of consumer might not think they need to enlist the help of a mortgage broker – so brokers must position their services in a way that adds value through convenience.

Help clients buy with less time, cost and stress. Understand consumer’s evolving behaviors and needs. Extract data about consumers in the mortgage industry to analyze current market trends. All of this can be done through one platform when you choose technology such as ReadyPrice. Keeping abreast of this industry knowledge can increase a broker’s credibility and inform decisions to market compelling products and rates that appeal to even on-the-fence customers.

Selling rates that entice even the most informed consumers is a sign of a successful product, but once a buyer has chosen you, how can you retain them? Deloitte found that consumers rank support as the most important reason for using broker services. Use your tech to ensure you deliver this support – it’s already integrated with a consumer-side interface when you use ReadyPrice. Build market competitiveness in the mortgage industry and deliver when clients are onboard.

Digital literacy

Technology is the mortgage industry’s future and your educated consumer knows it. Incorporating the right digital tools makes the loan process easier and more accessible for lenders, brokers and consumers alike. An educated consumer knows what they are looking for and is likely aware they can complete the loan process with a few clicks. Software provides quick results and fewer hassles, allowing brokers and consumers to easily sift through lenders’ rates to find the best ones.

Technological tools like automated software and artificial intelligence (AI) have transformed the customer experience. Improvements to loan services and underwriting through the use of technology have helped brokers be faster, sharper and lead modernization in the industry.

With such a prevalence (and preference) for leveraging tech in the mortgage industry, there has never been a more critical time for brokers to wise up on software solutions. Consumers, with the assistance of digital products, are more technologically savvy – with a click of a button, they can compare rates from a series of lenders and choose the most suitable.

ReadyPrice’s software uses a powerful pricing engine to help brokers manage lenders and find the best rates for their customers. It’s free for brokers to use, easily run AU, and deliver loans to the lender of choice. No-one wants to be on the phone for hours with different brokers and lenders comparing rates. Provide all the information they need in the quickest and simplest way possible with price calculators and automated chatboxes.

The intelligent software integrates Fannie Mae and Freddie Mac to enable one-click AUS and findings, streamlining the underwriting process. Harnessing ReadyPrice technology can improve accuracy and speed in underwriting. This time saved brokers can put towards improving customer service and delivering personalized customer experiences. 

Offering the best-in-class

ReadyPrice technology helps brokers market their rates and position themselves toward consumers in a stress-free way. Flexible for every broker’s needs, this software is easy-to-use and can be applied to each stage of the loan process.   

Give your customers peace of mind that their loan is being handled in the most efficient way possible. Create an account with ReadyPrice, book a free demo and see what they can do for you.

Written for ReadyPrice in June 2022