How to Reinforce Your Pipeline During Rate Increases and Inventory Strains

October 21,2022
Rising interest rates are here, but loan officers and business development representatives shouldn’t fear.
In the current rate storm, it’s all about your mindset. Yes, rates are higher and housing inventory for buyers remains low. You might pre-approve several applicants only to have one or two enter escrow and actually reach homeownership.
Nonetheless, the crucial steps and “clean up” efforts you take today to become more efficient and bolster your pipeline of business will affect the future. Here’s how to get started:
  • Look for unchartered lending opportunities. If you’ve been soliciting homebuyers/borrowers in the same geographies, maybe it’s time to expand your horizon. Simply getting out of your comfort zone and competing outside your routine territory will elicit more leads or new relationships. Additionally, rising home equity means it’s the perfect time for some middle-agers or retirees to do a HELOC, home equity loan or even a cash-out refinance.
  • Drive your borrower relationships to new heights. Make use of your bandwidth in areas promising future ROI, such as marketing, engagement, outreach, social media, touchpoints, in-person events, borrower educational opportunities, etc. Using this time to build new relationships and foster current connections with both consumers and real estate agents will solidify future business and lending opportunities.
  • Remind borrowers you are looking out for their future wellbeing. There will be opportunities to refinance current buyers many months into the future if mortgage rates dip, especially if some have better credit scores than today. You have a prime chance to remind homebuyers of this fact while also being a trusted mentor and advisor through continual outreach and education in the interim. You may also be able to help borrowers eliminate purchase mortgage insurance (PMI).
  • Refocus on learning and development for yourself. Slower business periods are optimal times to work on your professional growth. Whether it’s a course to brush-up on the latest industry tools and trends or if it’s making sure your processes are up to date, make sure you invest in yourself. Do it now so you won’t fall behind when your lending pipeline starts ramping up again.
  • Seriously consider a revamped business model. What’s your lending niche? How do you obtain leads? How do you engage past borrowers compared to current borrowers? What’s your ongoing business plan? Is it updated with the current state of the housing market? Do any of these areas need to pivot? Now is the best time to think about these questions and more.
  • Navigate using common sense budgeting and planning. Get serious about micro-planning every part of your budget going forward. Oftentimes, pre-budgeting and financial planning can help many loan officers ride-out interest rate and marketplace volatility for months on end. It all comes down to the monthly and yearly numbers, which you are already a pro at analyzing for others. Do it for yourself and do some financial belt-tightening.
  • Don’t haphazardly spend on marketing, advertising, leads or systems. Be smart in how you apportion your lead-generation expenses and brand presence. In today’s purchase market, make sure you target ROI over anything else. Be mindful of other costs as well, including operating expenses. Rethink contracts with vendors and tech-stack platforms, making sure you can justify the expense. When needed, talk with them and work out your situation personally.
Take this time as an opportunity to revamp your business plan and tap into new opportunities!
by CU Members

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