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1: Create new refi opportunities
Help customers understand the many options available to them through refinancing. For instance, they could reduce their monthly payment, shorten the time to their freedom point (payoff date), pull out equity to pay off debt, send a child to college, buy a second home, renovate their existing home, or move up to a bigger home.
To understand how and why a refi can help them, start by asking every homeowner these questions:
- What is your current rate?
- What is your loan amount?
- What is your equity?
- What debt do you have? Student debt? Car loans? Credit cards?
- What are your goals?
Then provide a variety of options that might meet their specific needs.
2: Rent vs. own analysis
The pandemic has disproportionately hurt renters. To turn renters into first-time homebuyers, show the cost-per-month difference between renting vs. owning, as well as the long-term benefit—how much equity they can build over time. Also, show varied down-payment options. One thing that holds people back from buying is that they think they don’t have enough down payment, but often, they do.
As a mortgage advisor, you can help renters understand the value of owning. And if you help real estate agents tell that story more effectively, as well, you’ll boost your referrals. (Mortgage Coach tip: Watch how top producer Denise Donoghue uses social media to promote her rent vs her own analysis.)
3: Move up analysis
Show homeowners how they can afford a larger home by suggesting different down payments and rate options. You can provide term options for 1, 2, 3, 5, or 7 years. I recommend including a 5-year loan as your standard short-term option and a 15-year loan as a standard long-term option. (Mortgage Coach tip: Watch how Amber Kovarik does a move-up analysis.)
4: Debt consolidation analysis
A little over a trillion dollars in equity has accumulated over the last 12 months, and equity is forecasted to continue to outperform this year. The latest Home Price Expectation Survey (Q4 2020) says that between now and 2026, the average home purchased at $300,000 stands to gain $54,000 in equity. Show people how they can use the equity in their homes to restructure and pay down debt. Go beyond the basics: break down your customer’s current situation vs. their monthly savings, including how much total interest they’re paying, not just on the mortgage, but on all their debt, and how that would change with consolidation. (Mortgage Coach tip: Watch how a new loan officer helped a single mom with a debt consolidation refi.)
5: Cost of waiting for analysis
Renters and existing homeowners often wait to buy because they think they don’t have the liquidity they need. At Mortgage Coach, we use a Cost of Waiting Analysis to show them the risks of not taking action. These include climbing rates, loss of equity in the new home that they could have built, and even an opportunity to consolidate debt.
More people are working out of their homes today and that trend will continue for years to come. Ask these definitive questions: How can I give you a financial makeover and optimize your cash flow? How can I give you a real estate makeover, optimize your equity and help you build wealth with real estate faster? That’s a conversation that consumers want more now than ever.
Become a master at these 5 strategies and you will crush your 2021 goals.