The housing market has always been a key driver of the economy, and this year is no exception. Even with ongoing economic issues due to the pandemic, 2020 has been a remarkably strong year for the mortgage market thanks to your tireless work.
Lenders continue to be extremely busy with refis and a purchase market boosted by record-low interest rates and higher credit scores. According to the Mortgage Bankers Association (MBA), as of the end of October, the 30-year fixed mortgage rate was 3.01% and purchase application activity was up more than 25% from the same time in 2019.
While this tumultuous year is far from over, 2020 will soon start to wind down – and it’s time for mortgage loan originators to map out their performance goals for 2021. CreditXpert’s Vice President of Sales Matt Hydrew sums it up this way: “Prepare now to ensure your business is profitable while doing the right thing for your clients.”
What can we expect in 2021? And what can you do to meet your business targets in next year’s market?
The MBA predicts that the purchase market will continue to grow over the course of next year, but refis will dwindle since people who could benefit from the low rates likely did so in 2020. In this market environment, according to Matt, the key to success will be to focus on borrower care.
“Engage clients early and often. CreditXpert tools will be invaluable for helping you evaluate the potential of borrowers in your prequalification pipeline,” Matt explains. “There may be people in your pipeline who just need a little more time – and an expert plan of action – to improve their mid-score to meet requirements for a loan or better rate. Telling these borrowers ‘not yet’ instead of ‘no’ means keeping their dream alive and not losing their business.”
Using CreditXpert tools, you can tailor a credit score plan for each person according to their individual situation. This gives your applicant step-by-step instructions for completing a set of actions within a defined time frame, helping them reach the mid-score they need to close the deal and buy their home. In the process, you’ll build trust and instill confidence in your client with your knowledge and expertise. According to Matt, this could especially make a difference for leads in your pipeline who weren’t referred to you by a Realtor or other industry professional you know from your network. “These types of prospective applicants with credit challenges are shopping around to get the best financing,” he says. “Taking a borrower-care approach and positioning yourself as a trusted advisor looking out for their best interest can help you convert those ‘tougher’ leads now and generate more business in the future.”
For some borrowers, seeing the plan through may take longer than for others. Qualifying for a mortgage can be challenging if credit scores trend lower, as student loans come due and unemployment increases. But the effort will be worth it. CreditXpert tools automate the process and help you be the hero by increasing access to financing. The result: You know you’ve given every applicant the best opportunity to get the home they deserve.
By implementing borrower care, you’re showing people that their business and dream of homeownership matter to you. In the end, you will have a satisfied client, a new referral stream and more closed loans.
Check out the ways CreditXpert® What-If Simulator™ and CreditXpert® Wayfinder™ can help. Stay tuned for the December edition of our Xtra Credit e-newsletter to get more insights about planning for 2021 success.