Mortgage Problems Loan Officers Face and How to Overcome Them

Top Producer Tips
Top Producer Tips

Mortgage Problems Loan Officers Face and How to Overcome Them

mortgage problems

Loan officers come across several mortgage problems when trying to close loans. After all, getting a loan is a huge financial decision, and borrowers have a lot of uncertainty.

Keep reading to learn the most common mortgage problems loan officers face and how to overcome them.

mortgage problems

Mortgage Problem #1: It’s Cheaper to Rent

One of the biggest mortgage problems loan officers face is their leads often think it’s cheaper to rent. Purchasing a home is a huge commitment, and a lot of people are hesitant to make that decision for various reasons. For some, the down payment might be too high, and for others, they think it will be more expensive due to fees.

Solution: Inform Them of Their Options

There are several benefits to owning a home that renting simply doesn’t offer. So, present these options and explain how owning is better than renting!

Let them know it won’t be as costly as they think. Begin by informing them of programs that don’t require a high down payment. Then, explain how a mortgage protects them against inflation. Also, remind them that rent doesn’t build equity and you won’t have the freedom to customize your home.

As you know, each lead has different needs. So, it’s important to have the right pitch prepared.

But, if it really doesn’t make sense for them to purchase right now, let them know why! This is a great way to establish trust and let them know you truly have their best interest in mind. It may not be the right time now, but it will be in the future. 

Mortgage Problem #2: Borrower Burnout 

The top mortgage problem loan officers face with clients is borrower burnout. Experienced borrowers are aware they can save money when rates drop, but they’re not sure if it’s worth it. They’ve been through the process before and don’t want to go through the hassle and paperwork refinancing requires. 

Solution: Make it as Easy as Possible on Your Borrowers

Refinancing is an exhausting process for all parties involved. So, make it easy on them! Mortgage professionals all have similar products and rates that they offer. What sets you apart is the quality of service you provide.

Make sure you present your pitch in a way that is easy for anyone to understand. The mortgage process is an overwhelming experience because it can be difficult understanding the different rate options. So, streamline this process and take advantage of Mortgage Coach’s features. Mortgage Coach allows you to easily create a presentation that visually presents specific loan options.

Then, have a Needs-List prepared so borrowers know exactly what documents they need to prepare, and update them as they go through the loan cycle. By simplifying the mortgage process, you can help overcome borrower burnout. Separate yourself from the competition and make the process as seamless as possible.  

Mortgage Problem # 3: They Have Poor Credit

Another common mortgage problem loan officers face is their prospects have poor credit. A bad credit score will lead to higher interest rates, or worse, not even getting approved for the loan.

Solution: Help Them Improve Their Credit Score

Again, just because now isn’t the ideal time to refinance or purchase a home, that doesn’t mean it won’t be in the future. Set yourself up for success down the road and help them improve their credit score! After all, you are their trusted advisor. 

Best of all, this can be accomplished in seconds. If you have a mortgage optimized CRM like Jungo, it will have a ready-to-launch drip marketing campaign that will give them tips on improving their credit. That way, when they’re ready to secure a loan, you’ll be the first person that comes to mind.

Mortgage Problem #4: They Try to Predict the Market

Another common mortgage problem loan officers face is their borrowers are trying to predict the market. During the pandemic, interest rates were at record lows, and it was a great opportunity to refinance, and purchase a home. Because of that, a lot of borrowers are hesitant to pursue a loan because they think interest rates will go down or housing will get more affordable.

Solution: Show Them the Facts With Credible Sources 

Buying when the market is low and selling when it’s high is a strategy a lot of borrowers try to use. As you know, every financial expert will tell you to avoid this strategy. Interest rates and housing prices are constantly fluctuating, and it’s impossible to predict what the market will do next.

So, show clients how waiting can cause them to miss out on a big opportunity. With property listings being removed almost immediately, it’s no guarantee their dream home they found will stay on the market. Also, it’s not a guarantee that future interest rates will save them money like it would today.

Mortgage Problem #5: They Already Refinanced This Year

A lot of borrowers are proactive and already took advantage of the current interest rate. So, they’re either not eligible, or, they already have the lowest rate.

Solution: Nurture the Relationship

There are mortgage problems that you won’t be able to instantly overcome. A huge mistake loan officers make is only focusing on leads that are interested in getting a loan right away. But, you need to plan for the future. Experienced borrowers are the best leads to have because you know they’re willing to refinance and they’re already familiar with the process.

So, nurture your relationships and provide value to your leads. That way, when the time is right, they’ll look to you for their mortgage needs.

Bottom Line

You’re going to come across a lot of mortgage problems that borrowers have. After all, getting a loan is a huge financial decision and many borrowers are inexperienced with the process. So, make it easy on them! By ensuring the process is as seamless as possible, you can help borrowers overcome any uncertainty they may have.