Loan Officer Sales Training 5/06/24: Beating Competitor's Rates

In this compelling episode of "Loan Officer Sales Training," we tackle one of the most common challenges faced by mortgage professionals: competing with lower interest rates offered by competitors. Join our host, a seasoned loan officer with a knack for staying ahead of the game, as they dissect strategies to effectively address this issue head-on.

Discover innovative approaches to differentiate yourself beyond just rates, including emphasizing the value of personalized service, highlighting your expertise, and showcasing the unique benefits of your lending products. Our guest experts, industry leaders who have successfully navigated competitive landscapes, share their invaluable insights on how to position yourself as the superior choice for prospective borrowers.

From leveraging creative financing options to emphasizing the long-term benefits of working with your institution, this episode provides you with practical tactics to not only match but surpass your competitors' rates. Learn how to effectively communicate your value proposition to potential clients, ensuring that they understand the comprehensive benefits of choosing you as their trusted mortgage partner.

Tune in to "Beating Competitor's Rates" and equip yourself with the tools and strategies needed to win over clients, even in the face of fierce competition.

For more episodes visit:
https://themortgagecalculator.com/Page/Loan-Officer-Sales-Training-Podcast

About The Mortgage Calculator:

The Mortgage Calculator is a licensed Mortgage Lender (NMLS #2377459) that specializes in using technology to enable borrowers to access Conventional, FHA, VA, and USDA Programs, as well as over 5,000 Non-QM mortgage loan programs using alternative income documentation! 

Using The Mortgage Calculator proprietary technology, borrowers can instantly price and quote thousands of mortgage loan programs in just a few clicks. The Mortgage Calculator technology also enables borrowers to instantly complete a full loan application and upload documents to our AI powered software to get qualified in just minutes!

Our team of over 350 licensed Mortgage Loan Originators can assist our customers with Conventional, FHA, VA and USDA mortgages as well as access thousands of mortgage programs using Alternative Income Documentation such as Bank Statemen

The Mortgage Calculator is a licensed Mortgage Lender (NMLS #2377459) that specializes in using technology to enable borrowers to access Conventional, FHA, VA, and USDA Programs, as well as thousands of Non-QM mortgage loan program variations using alternative income documentation!

Using The Mortgage Calculator proprietary technology, borrowers can instantly price and quote thousands of mortgage loan programs in just a few clicks. The Mortgage Calculator technology also enables borrowers to instantly complete a full loan application and upload documents to our AI powered software to get qualified in just minutes!

Our team of licensed Mortgage Loan Originators can assist our customers with Conventional, FHA, VA and USDA mortgages as well as access thousands of mortgage programs using Alternative Income Documentation such as Bank Statement Mortgages...

Transcript

Restream recording May 06, 2024 • 04:04:12 PM: 0:00

So welcome everyone. My name is Kyle Hiersche. I'm the COO of the Mortgage Calculator, and this is our loan officer sales training that we do every weekday at 12 p. m. Eastern, where we go through the front end and the sales end of mortgages. Today, we're going to be talking about Beating competitors rates. So how do we beat competitors rates? How do we compare the competitors rates? And then specifically, what are the solutions that we have here at the mortgage calculator as well? So let's go ahead and get into it here. Full screen here. All right. So the number one issue when it comes to competing for rates, right? Well, first of all, at the mortgage calculator, we try not to get into this game, right? That's why we love specializing in non QM loans. We love specializing in, in loans for investors. And so, you know, we try not to play the race to the bottom game, but There's going to be times where people say they're getting lower rates, right? The biggest issue and this is especially for new loan officers out there. The biggest issue is that for one, you have no idea what they're getting unless they send you an LE. They have no idea the rate they're getting unless they're showing you a locked LE, right? But the, the main thing is just usually not comparing apples to apples. Right. That's the biggest, most common problem when trying to beat a competitor or compare rates. And especially for a loan officer, that's not super experienced because even experienced loan officers, this is an issue with if you're not super experienced. You might not catch all the different things that are creating you getting beat in the first place because at the mortgage calculator, our margin is always 2. 75, right? So if we're brokering a deal, we're 2. 75. If we're the lender, we're 2. 75, which means. That our pricing is way better than everyone else's. Because as far as my knowledge, we're one of the only correspondent lenders out there that's keep their margin at two, seven, five. The reason why people spend millions of dollars to get their license as a lender like us is so that they can raise their margins. However, we do not do that. We keep our margin the same. So instead of raising the margins, our margins are even lower because we get. Rate decrease because we're funding the loan ourselves. So there's, there shouldn't be a time where somebody's beating you, right? And in the history of the company, we've only had one price match ever be sent in that was an actual price match that was getting beat by a little bit. For the same loan, just because the other loan officer like cut their comp in half, right? So sometimes you just can't compete. If somebody is going to do a loan for a hundred basis points total to their whole company, I mean, you know, sometimes you just can't compete with that, right? It's just not realistic for anyone to do unless you were to cut your comp. To that. And there's no use in that, right? We don't play the race to the bottom game. So my point here is that you're not going to be getting beat out there, right? We have better pricing than almost everyone else. And the reason for that is because we fund our own loans, but we keep our margin the same as if we weren't funding our own loans, everyone else who funds their own loans is going to increase their margin. That's the whole point, right? But we're kind of a different model here. So my point is, if you're at the mortgage calculator, you're not going to be getting beat all the time. So. Again, we have the price match, which we'll go over here in a little bit mechanism for you. And it's never actually had to have been used. And the reason for that is mostly because you're never going to actually get a locked LE that's going to beat you. Right? So get a locked loan estimate. That's the first step to beating the competitor's rate, right? Or even comparing their competitor's rate. If your client's saying, Hey, this person is giving me this rate. You need to beat it. Then you say, okay, send me over the locked loan estimate. Oh, you don't have a locked loan estimate. Well, then you have no idea what rate you're getting, right? If they send you over just a loan estimate, that's not locked. Then that's fine, but you need to make the client understand that it means nothing. It means absolutely nothing. Unless it's locked, right? Even when it's not locked, what can happen is you find out. That it's not you know, really what doesn't match their situation because there's so many irresponsible loan officers out there from companies that just let them send out what Jose calls toilet paper, right? Like it's only as the, the approvals and the LEs are only as good as the paper that they're written on. Right. And so they're going to get all kinds of stuff. You know, but at the end of the day, it's your job to know what is, is reality. Right. And that's going to start by not only getting the loan estimate, but it's going to start with the interview with your customer. So it's going to start with the interview of the customer, but it's also going to continue once you get the loan estimate. So if they're telling you that they're beating you on price, now there's another interview that you need to conduct to go further into this, right? What looking at the elite, what is the credit score based on? Okay. Well, this credit score is based on this. But I quoted you based on that. You told me your credit score is 680, but this le that you gave me is based on 740. Of course, it's beating us, right? If you want me to quote you on 740, then I'll send you a 740, but you told me your credit is 680. So what good does it do to have a le for 740 credit, right? Also the loan program it's based on. I mean, we've seen le's for investment properties that are quoted as primaries. right? All kinds of stuff like that. Because again, alone officers out there, some are inexperienced, some are just shady and scheming. You know, and so you got to really pay attention is something as simple as you would think like, oh, it's an investment property. You wouldn't even be looking at the you know, the actual loan type or whatever it is. Right. And then special requirements. So here's a big one that people miss out on a lot. Right. So let's say they have a locked LE from a competitor. And it's, it's beating you by a lot and you're going, how the heck are they, are they beating me? Well, if you look at the programs carefully, you may see that they may have quoted them on programs that they do not qualify for, such as ones that have income restrictions, right? Yes. There's a much better programs with better pricing and lower down payments. But you have to meet those income restrictions. So that's another conversation with the borrower. Well, they quoted you on a you know, home possible or whatever it may be, but you know, there's restrictions to this program and then ask them, do you meet these? Requirements. And if they don't, this is when this stuff happens, it's not only an opportunity for you to correct the situation. And, you know, you start comparing apples to apples and start down your road of a solution. It's also an opportunity to prove that you are a professional loan consultant, that you are honest and that the other person they're dealing with is most likely not. Honest and not being a proper loan consultant, because as soon as you start pointing these things out, they're going to go, well, why is that person trying to, it, you know, automatically seems like a scheme, right? Like, oh, well they should have known that, or they didn't even ask me that they didn't bother. They're just giving me rates on programs. I can't even qualify for. And so you use that opportunity to not talk bad about people, but just to establish yourself as, Hey, Yes, I do the extra research. I am a consultant. I'm only going to quote you on programs you can qualify for as to where this person is just trying to send you the lowest rate to rope you in to get you. And then you're going to see that everything is totally different. They're going to go, Oh yeah, you don't qualify for that program actually. Well, yeah, I mean, that's something you should figure out before you start giving them LVs with that program. Right. And then of course, occupancy again. Yeah. Touched on it earlier. You know, you'll literally see LEs come through with a whole different occupancy than what you were talking to the borrower about. And so you've kind of got to go, wait a minute. Are we talking about an investment property or not? Right. What are we talking about? Because this is a quote for a primary residence. I can give you a quote for a primary residence that beats this too, but you told me it's an investment property, a huge difference, in pricing. So occupancy too, and also borrowers understanding. Are there multiple borrowers, right? Are there things against certain borrowers in the guidelines? Is this closing in an entity? Does the entity have multiple owners? Are there other owners over 25 percent, which is usually the threshold for them wanting them to sign the loan to? I mean, these are all things that are going to make a difference in the pricing because they're going to make a difference in the program. Right. And so we need to know, and that's our job as a loan consultant. So for the newer loan officers out there, especially see how, once you dive into this, that's what we keep talking about time and time again, of a loan officer consultant, you, it's not just the initial interview. It's not just talking to them or quote unquote, making a sale. These are things that you really have to dive into and you're doing it for the client, right? For the we always must have the client's best interest you know, at, at heart. That is what we you know, are required to do by law. And so we're going to continue to do that throughout the process. And this is much more than just making a sale and beating their rates. This is also educating the client so that they're not getting scammed by other people out there because what will happen is your client, you know, let's say they don't move forward with you because they don't quite understand what's going on. They move forward with that other person. It's going to harm them. They're going to end up paying more than they thought they're going to end up paying more than they would with you, right? So it is going to end up hurting them. And so this is all for the good of the borrower, right? So we need to be a loan consultant that way the borrower knows, even if they don't work with us, they know their, their rights and how things work. And they know that you were a professional that consulted them. So that's the first thing. We got to see the locked loan estimate. We got to analyze the locked loan estimate, right? Well, I guess I should say here, we got to see the locked loan estimate, and then we need to ask the questions about the locked loan estimate so that we can analyze it. Right. Which is, is this screen here? So we're going to analyze the actual LE. So what are we talking about here too? We need to look at the term. Did they quote them on a 15 year, right? Or a 30 year. We need to look at the amortization type. Is this a 40 year amortization instead of a 30 year? These are all things that are going to make huge differences. In the rates, right? Is the LTV the same? You would be surprised how many people send in an LE saying they're getting a cheaper rate when the person quoted them on 25 percent down instead of 15 percent down or whatever the situation is, right? And you also have to look at it for mortgage insurance. Is it a loan that's going to require mortgage insurance? If it is, is that on there? Is that going to explain to the client? Is the, are the actual you know, like the title fees and everything like that. A lot of people just leave all that kind of stuff off the LEDs and stuff to make it look better, but in reality, you know, these are costs that are going to come up. And so it looks kind of deceivingly. Good to the client because they don't see a ton of fees. Right. Also the property value. A lot of the times a loan officer will just send a crazy value, right? They're like, Oh yeah, we, you know, we could do you know, 80 percent LTV or whatever, and then they'll just say, yeah, I quoted it based on it being worth a million dollars yet Zillow says it's worth a half a million dollars. Right. So these are things that they can do too, that you're not even realizing what's going on, but when we're talking about you know, refining, we don't know what the appraisal is going to come in at, or what it's actually worth or what LTV we can do. So these are issues as well. And also the address in the area, big, big thing. Is it rural or not? That's huge because most loan programs are just going to disqualify them completely if it's rural, right? If the property is marked as rural. So, you know, you're, they're either not going to qualify for that loan at all possibly, or if they do, it's going to be more expensive. And so the address and the area is definitely super important. Now we're not really talking about commercial stuff here, but just a side note on the commercial side, remember that. Most commercial places are only going to do certain zip codes. And they're very strict about it. Cause they talked about this on the daily rates lab, right? That they're going to immediately just say, no, if it's in let not too little population density, too high of crime rate, they have all these statistics and they just have a thing that says, do we lend in this zip code or not? So while a competitor may be giving them a quote. You know, on the commercial side of things, again, this is more of a side note. We're not talking about commercial here necessarily, but on the commercial side you know, it could be a possibility that they probably can't actually, you know, they may get a quote, but the, none of the actual commercial lenders are going to actually lend there. Right. And so now you're like, okay, well, they quoted you on something. That that's probably not going to, right. But in, besides in commercial, really the big thing with the address scenario is, is it rural or not? Cause now we're not even on the same planet if we're comparing anything, if it's, if we're comparing non rural to rural, and then, so the last thing here. So what does this mean? How do we utilize. our tools here at the mortgage calculator. Well, again, you shouldn't be getting beat. So you should know that don't give up on deals thinking, Oh, our rates aren't as good. You have to dive in because I promise you nobody's has cheaper rates out there, right? There's no special magic rate sheet out there that somebody has this way cheaper, especially because we don't raise our margins. So you shouldn't be racing to the bottom in the first place. When you are told that somebody has a better rate. You need to ask for the LE obviously you can't even them and you can't even speculate if they have a better rate. And if they're not providing that or not you know, kind of, if they're kind of like, oh, well, you know, just give me a better rate or whatever. You can't quote them unless they give you the LE, right? You're like, I can't quote, you can't compare the pricing. I cannot. I'm going to give you pricing the same pricing that they did. If I don't have the Ellie, so you're not comparing rates. You got to let them know that like, Hey, unless you give me that Ellie, you don't know who has the better rate. So I need the Ellie so I can quote you. And then you can compare because right now you're not comparing, right? You're, you're, you're not comparing at all. Unless I see it and we say, yes, a hundred percent. We're quoting the exact same scenario, exact same term and more type LTV. There's mortgage insurance on it or not. The property value, the address. The occupancy, the borrowers, the income, all of these things have to be checked off and say, okay, yes, we were quoted the exact same thing. Now here's your quote. Now compare this quote to the other quote or the other LE. So make sure if your client's not really wanting to do this, and sometimes people are just kind of lazy and never want to send it and stuff like that, but just make sure they understand. You as the client are doing yourself a disservice because you are not actually comparing rates. You're not shopping to get the best rate as the client, right? If you want to do that, then I have to have the LE so that I can actually give you The rate that you can compare, right? So once you do have the LE and if you can't figure out why you're getting beat, then you just utilize the price match desk. So on the support directory, scroll down to price match, submit it, attach the LE, give a little detailed, you know, breakdown of what's what's going on with it, and And then our team will review it. And the first thing they're going to check is did you properly check if it's, you know, being compared apples to apples, then they'll price it and see if you had, you know, priced it correctly. Maybe there was a mistake on the pricing and that's why you know, you were getting beat out a little, and if not, then we'll figure out something else to do. Now, again, you know, If if somebody's doing it for 100 basis points, total calm, we're probably too far apart to even consider doing anything right. But there are things that we can do. And again, it's only happened 1 time, only 1 time in the last, you know, Three years now has somebody actually sent in a locked loan estimate. That's actually apples to apples. That was beating them out by a tiny bit because the loan officer was taking a cut on their comp and we figured it out and made it happen. So I promise it's not something you're going to run into all the time. When you do run into it, make sure to ask for that Ellie, make sure to let them know if it's not locked, then it means nothing, make sure to interview them, you know, as soon as they start talking about, Hey, I got a better quota and got better rates. This starts now, right? This interview process of saying, Hey, I want to look at it. Can I see it? So I can so I can properly compare it. And then you're diving into your questions to make sure that you know that once they send you the L. E. You can actually look at it and say, okay, here, but I, here's my notes that I talked to the borrower about, you know, this is their actual scenario. And then here's the LE doesn't match. And, you know, then so on and so forth. So should not really be an issue. You should be on the front end of this. You should also be, you know, shooting these down. As soon as you see them come in, I was like, Oh, they quoted you on a completely different LTV and credit score. You know, now I'm going to send you a quote with that LTV and credit score. Now you can compare those, right? So it should be pretty easy for you to do, especially after the training. But if there is an issue and you actually think you're getting beat and you can't find out what is going on or how they could be beating you or what's different from the Ellie than your quote at that point, use the price match desk. So we can figure it. All right. I don't see any questions here. Again, I'm trying to keep these pretty short here. Okay. But definitely don't be afraid to use the price match, but, you know, make sure to, especially after this training, you know, go through these steps first, right? These are always the first steps because the price match desk can't do anything without the LB. Right. So you've got to go through these steps and you have to have this information. You have to have the LE, then if you go through everything and don't see what's wrong, then you can submit it to the price match desk. So make sure you're going through this regardless, because either way, you're going to need the information. I don't see any questions. Thank you everybody for tuning in. Remember we do this 12 PM Eastern every weekday where we go through the front end and the sales end of mortgages. So. We will be back tomorrow with a new topic. Appreciate it. And we'll see you tomorrow, 12 PM Eastern for the next episode of the loan officer sales training with the bank.