How do you select the right lender?
Leverage Your Referral Potential
What good is a database if you are not maximizing it as an effective
marketing and communication tool? By networking with
another professional and introducing the new professional's products,
services or solutions to the client base, the referring professional
has created another excuse to market and “stay in the mind
of” the client. Our Preferred Professionals find this
helps maintain their hard earned client relationships. An
example: A mortgage professional was introduced to a client
from an Estate Planning Professional and the professional recommends
that the client refinance and in the process have the loan documents
accurately reflect “the new living trust” during the
creation of the trust. This could save the client time
and money from needing to do this once the trust is created.
A financial planner may want to semi-annually send out a joint
marketing piece promoting a “debt evaluation check up.”
During a refinance market this is critical.
Maximize the Profit Potential Per Client
Most financial planning professionals who sell mutual funds set
up IRA’s or other retirement vehicles to get paid a commission
for services rendered and continue to get paid as those accounts
accumulate wealth. This does vary from professional
to professional. One financial planner I work with shared
with me that he is compensated 1% to 3% of the total monthly deposits
his customers make into their retirement mutual fund account.
“Replace credit interest debt by refinancing and rolling
credit debt into your mortgage (now a possible interest deduction)
and deposit those monies into your retirement account.” Financial
planning professionals need to maximize their clients' retirement
planning potential!
Protect Your Relationships
Recently a firm telemarketed over 100,000 Legal, Financial, Taxation
and Financial Planning firms across the country and one question
they asked was; “in conversation with your clients, does
the topic of mortgage lending or refinancing ever come up”
or “can refinancing be used as a tool for any of your clients
needs?” Two out of three responded, “YES!.” They
would then follow up with a second question: “Do you have
a strong referral relationship with an existing lender or do you
let the client select his or her own professional?”
NINE out of TEN respond; “I pretty much let the customer
select their own lender.” Hopefully, one can
understand that by not introducing the client to an associate
for their other professional needs, the client has the opportunity
to develop a relationship with a non-competing professional that
may have a strong referral relationship with your competitor.
The professional that does not provide the referral solution for
their client could be left behind or their services challenged
by a competitor. Having a trusted mortgage professional
to refer your clients to, and to guard your relationship with
them is not an option, it's a matter of economic survival!
Small Community Banks
Why are small community banks anxious to establish relationships
with local mortgage brokers? If the community bank
cannot provide a financial solution for their customer due to
a limited supply of mortgage lending products, then that customer
has to go to a competitor (another bank) for their solution.
If the customer goes to a Bank of America or Washington Mutual,
those companies will solicit all of their checking and savings
accounts to be moved. A local mortgage broker is a
safe solution because they do not provide checking and savings
account services. From the smaller bank's point of view,
establishing this referral relationship is not an option, it’s
a matter of survival and protecting their existing relationships
(deposits). I have heard stories of Financial Planners
referring their customer to the large nationwide lenders with
a presence in their markets. Do these planners realize what
a business risk this is? Don’t they know that Washington
Mutual, Bank of America, Citibank and the other major financial
institutions have divisions that provide the same financial services
the referring professional provides?
If you are a non-lending professional reading this outline, hopefully
you can see the value in creating this type of referral environment
and developing a strong professional relationship with a mortgage
professional.
How Do You Select the Right Lender?
A common question is “how does one select the right lender?” To
find the answer we should look to the industry that works with
lenders the most, as they would have the most experience with
a lending professional. That would be a Real Estate Professional.
Real Estate Agents that find a good lender do not switch very
often. Why? Because good lenders are hard to find. When
we think of a lender, most consumers automatically think of “lowest
rate.” The lowest rate for a lender can probably be
found on the Internet. Just like the lowest rate for a stock
trade or direct mutual fund investing can be found on the Internet.
Just like the lowest insurance premium can be found on the Internet.
Just like the family planning “do-it-yourself” solutions
can be found on the Internet. Eliminating the middleman
always seems to be the least expensive route, but, be careful
what you wish for, don’t eliminate yourself in the process.
