Mortgage Marketing Blog
Intelligent Data for Financial Marketers
Three Actionable Strategies To Get More Business In The Climate of Rising Rates
Although mortgage rates have fallen again recently, with the 30-year
fixed rate mortgage averaging 4.22%, we are well beyond the hay days of
2011, and it begs the question: how do mortgage marketers survive – and
thrive – in a challenging rate environment? I wanted to answer this
question with three specific, actionable strategies, but first a couple
introductory thoughts/backdrop.
First, If you have been in the mortgage business for some time,
you have already weathered several cycles, and you know that regardless of the
rate environment, there is one prescription for success: Targeting the
right consumer by presenting them with the most appropriate offer, when they
need it most. This is an absolute that is insulated from the hick-ups
and fluctuations of the market.
Second, gone are the days when broad media advertising (television, radio, newspaper) was able to generate unprecedented call flow, because the benefits to locking in low rates is no longer overwhelmingly obvious. As rates climbed, the perceived cost of refinancing begins to outweigh the perceived benefit. Some strategies to overcome these forces:
1) Amping up direct marketing efforts to find customers.In a rising rate environment, it is critical to hunt for new customers and not wait for them to find you. As I submitted in an earlier blog post, there are still a staggering amount of mortgage holders that can benefit from refinancing, but have been staying on the sidelines unconvinced of the benefits. Savvy mortgage marketers can get through to these millions of credit-worthy homeowners by laying out in a clear, concise manner how these borrowers can save a significant amount on their total debt payments by either refinancing at today’s rates or tapping into that newfound equity to payoff higher interest debt (i.e., credit cards, personal loans). The “one on one” element of direct marketing allows you to put a relevant and powerful offer in front of these consumers that have thus far, been uninspired by broad media.
2) Add more muscle into your purchase mortgage marketing activitiesThe transition to new home purchases is taking steam and it’s tempting to sit back and wait for realtors and other referral sources to drive business to you. We recommend taking the proactive approach by aggressively finding those deals. Marketing to the right audience of purchase-oriented consumers empower mortgage marketers to drive “rate-agnostic” lead flow into your business. By relying less on realtor referrals, you can generate consistent scalable lead flow for purchase mortgages.
In addition, you can focus on improving conversion on purchase leads by reducing time to close. This can be done by reaching out to purchase-oriented consumers who are in the late stages of shopping. During the transition from a refinance to purchase market, you can maximize your success by targeting consumers that have either applied for a purchase mortgage with your competition or have listed their homes for sale. Both of these groups will have accelerated times to close a loan – less than 90 days, compared to the more deliberate, traditional purchasing market audience, which can take up to 180 days or longer to close.
3) Work the fringe of ARMSThere are unexploited opportunities in ARMS that you can capitalize on to create profitable, proprietary leads. Remember when doomsday was predicted when the ARM bubble was about to burst and millions of homeowners would default because of payment shock? Like the prophetic end of the world on December 21, 2012 on the Mayan calendar, the calamity never came to pass. Just the opposite, the masses of homeowners with ARMS saw their payments dramatically go south as the indices to which their rates were tied to dropped to historic lows.
Now this trend will reverse. These ARMs will adjust upward, resulting in higher mortgage payments. Those homeowners in variable mortgages will be strongly motivated to seek shelter from the storm of rising rates and into the safe haven of more predictable fixed rate mortgages.
As rates creep up, perhaps over 5% in the 18 to 24 month future, call centers will be eerily quiet if the mortgage community is too dependent on broad media, as it will become more of an uphill battle convincing consumers that they will benefit from a new 30 year fixed rate mortgage. Reverting back to the point I initiated this point with, it is smarter for mortgage marketers to zero in on the right consumer by presenting them with the most appropriate offer, when they need it most. At Datamark, our mission is to make the connection between financial marketers and consumers that represent their most qualified and motivated prospects, using the appropriate mix of data to fit the unique objectives of your campaign.
If you found this article to be informative, let’s continue the conversation. For expert consultation, call me at 607-761-5560, connect on LinkedIn, or send an e-mail with some criteria on who your niche audience may be. And to get the most up-to-date insights, why not become a fan on Facebook.
First, If you have been in the mortgage business for some time,
you have already weathered several cycles, and you know that regardless of the
rate environment, there is one prescription for success: Targeting the
right consumer by presenting them with the most appropriate offer, when they
need it most. This is an absolute that is insulated from the hick-ups
and fluctuations of the market.Second, gone are the days when broad media advertising (television, radio, newspaper) was able to generate unprecedented call flow, because the benefits to locking in low rates is no longer overwhelmingly obvious. As rates climbed, the perceived cost of refinancing begins to outweigh the perceived benefit. Some strategies to overcome these forces:
1) Amping up direct marketing efforts to find customers.In a rising rate environment, it is critical to hunt for new customers and not wait for them to find you. As I submitted in an earlier blog post, there are still a staggering amount of mortgage holders that can benefit from refinancing, but have been staying on the sidelines unconvinced of the benefits. Savvy mortgage marketers can get through to these millions of credit-worthy homeowners by laying out in a clear, concise manner how these borrowers can save a significant amount on their total debt payments by either refinancing at today’s rates or tapping into that newfound equity to payoff higher interest debt (i.e., credit cards, personal loans). The “one on one” element of direct marketing allows you to put a relevant and powerful offer in front of these consumers that have thus far, been uninspired by broad media.
2) Add more muscle into your purchase mortgage marketing activitiesThe transition to new home purchases is taking steam and it’s tempting to sit back and wait for realtors and other referral sources to drive business to you. We recommend taking the proactive approach by aggressively finding those deals. Marketing to the right audience of purchase-oriented consumers empower mortgage marketers to drive “rate-agnostic” lead flow into your business. By relying less on realtor referrals, you can generate consistent scalable lead flow for purchase mortgages.
In addition, you can focus on improving conversion on purchase leads by reducing time to close. This can be done by reaching out to purchase-oriented consumers who are in the late stages of shopping. During the transition from a refinance to purchase market, you can maximize your success by targeting consumers that have either applied for a purchase mortgage with your competition or have listed their homes for sale. Both of these groups will have accelerated times to close a loan – less than 90 days, compared to the more deliberate, traditional purchasing market audience, which can take up to 180 days or longer to close.
3) Work the fringe of ARMSThere are unexploited opportunities in ARMS that you can capitalize on to create profitable, proprietary leads. Remember when doomsday was predicted when the ARM bubble was about to burst and millions of homeowners would default because of payment shock? Like the prophetic end of the world on December 21, 2012 on the Mayan calendar, the calamity never came to pass. Just the opposite, the masses of homeowners with ARMS saw their payments dramatically go south as the indices to which their rates were tied to dropped to historic lows.
Now this trend will reverse. These ARMs will adjust upward, resulting in higher mortgage payments. Those homeowners in variable mortgages will be strongly motivated to seek shelter from the storm of rising rates and into the safe haven of more predictable fixed rate mortgages.
As rates creep up, perhaps over 5% in the 18 to 24 month future, call centers will be eerily quiet if the mortgage community is too dependent on broad media, as it will become more of an uphill battle convincing consumers that they will benefit from a new 30 year fixed rate mortgage. Reverting back to the point I initiated this point with, it is smarter for mortgage marketers to zero in on the right consumer by presenting them with the most appropriate offer, when they need it most. At Datamark, our mission is to make the connection between financial marketers and consumers that represent their most qualified and motivated prospects, using the appropriate mix of data to fit the unique objectives of your campaign.
If you found this article to be informative, let’s continue the conversation. For expert consultation, call me at 607-761-5560, connect on LinkedIn, or send an e-mail with some criteria on who your niche audience may be. And to get the most up-to-date insights, why not become a fan on Facebook.
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