Mortgage Refinance Applications are Booming: How Loan Officers Can Make the Most of It

There’s no shortage of breaking news right now. Among all the information coming at us every hour (or every few minutes, it seems) is the news that mortgage rates are low and refinance volume is up. That’s no surprise to people who work in the mortgage industry, but the average homeowner or prospective buyer may not be paying such close attention.

And even if they do read the news, consumers may be overwhelmed and in need of expert guidance for several reasons. First, interest rates for mortgages change from week to week. And second, the fear of COVID-19 may be keeping some buyers from jumping into the market. This economic roller coaster ride is a perfect recipe for consumer confusion

So what does the current state of the market and the economy mean for loan officers, and how can they make the most of it?

The biggest news: refinance volume is up.

Despite the fluctuating rate, one trend seems solid: low interest rates mean more homeowners want to refinance their loans. Mortgage rates dipped below 3% for the first time ever in July. Right now applications for refinancing are 84% higher than this time last year, and yet experts say that nearly 18 million borrowers could still save money by refinancing.

“Refinancing rates are in a constant state of flux, but they continue to represent a bargain compared to rates before the Great Recession,” says Bankrate.com.

The trend makes sense. You’d expect increased demand to follow low rates, but it’s also a reflection of our current economic anxiety. Homeowners may be looking for additional sources of financial stability, making them more open to refinancing than they would be under normal circumstances.

This also means that we may be seeing more first-time refinancers than usual. Those homeowners will be looking for brokers who can act as guides to an unfamiliar landscape, and they’ll need confidence that their broker is an expert at what they do.

Mortgage applications are trending down.

While still slightly stronger than this time last year, the volume of buyers applying for mortgages is falling from its summer peak. Contrary to many predictions, the real estate market actually surged despite the pandemic and record high unemployment, possibly because being stuck at home pushed buyers to seek out more space. But the boom seems to be waning.

You can expect fewer referrals from real estate agents, and LOs will be increasingly dependent on refinance business rather than new loans to keep them afloat through the downturn.

What does this mean for loan officers?

The increase in refinance activity will only help your business if your past clients and prospects remember you and turn to you for help. On the marketing side, you should be active in the digital spaces where your audience already spends time. Here are a few tips:

• Re-evaluate your social networks. Facebook may be the most obvious choice for reaching out, but do a little research. Look for your customers on LinkedIn, Instagram, YouTube, or other social media platforms that may not be your first thought. You should be where your audience goes.
• Be present in their inboxes. Speaking of spending time where you audience spends theirs, your past customers’ inboxes are exactly where you need to offer relevant information, because that’s where they spend their time. If you want to stay top of mind, a strong email marketing strategy (consistently publishing relevant newsletters that make the buyer or seller more informed) is necessary for success in good times and bad. Email continues to provide a tremendous amount of return on investment (ROI) but is easy to forget or dismiss as a valuable marketing channel.
• Be careful about over-promotion. Past and future customers want relevant information to help them make a decision, not just a series of sales pitches (or to never receive anything at all). Make sure you are sharing timely, relevant information that helps your target audience move further in their own journey. If you do it consistently, they’ll see you as the go-to professional in your local community and consider referring potential customers if they themselves are not in the market.

If you’re already staying in touch with your network via email and social media, you’re ahead of the competition and more likely to be top of mind when clients need you. The tricky part may be simply having the time to do it.

In a confusing time, you should be their trusted expert.

Right now, consumers are looking for someone to guide them through an uncertain, volatile market. That can be you, but only if you’ve taken steps to gain their trust and establish your expertise. Here are three ways to do that:

Share informative content. Anybody can quickly re-share a cute animal picture or a funny meme, but curating thoughtful content that provides value to your audience is a whole other ballgame. Focus on finding, writing, and sharing content that adds value to their lives. Topics like the top home repairs with the highest ROI, easy ways to save on your monthly energy bills, or simple ways to boost your credit score are winners.
Reply in a prompt and professional manner. As an expert, you’ll be asked lots of questions, from the simple to the rather complicated. Approach each of these questions as if you yourself were looking for an answer. Your answers should be prompt (within a business day at the longest, even faster is ideal) and also professional, not making them feel as if their question is silly. If a customer or prospect is waiting for days to hear from you, their opinion of your quality of service can drop. In that situation, their next step will be to reach out to the competition.
Keep the conversations going. More than likely, at least a handful of these requests are going to require a follow up communication. Review the responses you’ve gotten and see if there are any that would be more easily handled with a personal phone call. Leverage your contact management system to ensure you have all the necessary information at your fingertips. As long as in-person connection remains difficult, digital and phone connection will be crucial to guiding prospects toward a transaction.

Preparing for the future

You can’t predict what’s going to happen, but you can prepare for it. Businesses and economies are cyclical. While we may not ever be in the exact same situation we are today, that doesn’t mean something similar won’t arise in the future. It’s important to think beyond the current crisis.

In the spirit of “hope for the best but prepare for the worst,” here are three steps you should take:

1. Keep in touch regularly. If you’re scrambling now to get your messages out, you’re likely feeling behind or like you can’t catch up. Staying in regular touch all year round helps prevent this from happening.
2. Have content queued up. When your hands are busy answering important questions and taking necessary calls, you don’t have the time to write proactive emails and social posts that educate your potential client or promote your business. Having a topic ready to go that you can speak about at essentially any time can really help in extra busy times and position you as an expert in your field.
3. Consider the big picture. Many businesses find themselves busy at the same times every year. Start looking at your overall marketing plan for the year to get a handle on what your total time and effort is needed annually.

For many of our partners, looking for a marketing solution had been on their to-do list for years. If you’re like most of us, you’re reminded of the things you need to do when you have no time to do them. Instead, don’t put off today what you wish you had done yesterday (or last quarter).

One of the best ways businesses can prepare for spikes and lulls in activity is to delegate and automate what you can year-round. All businesses need a way to stay top of mind consistently, and marketing automation can deliver that. Marketing automation software can do the heavy lifting for you when it comes to regular and quality client communication. And that’s what OutboundEngine already does for thousands of loan officers. Click here to set up a time to talk with one of our mortgage industry specialists to learn more.