Several years ago, throughout the first half of this past decade and well into the last decade, refinancing of home loans was a term that had become quite popular, and common. Homeowners seemed to be in a constant rotation of refinancing to access the equity they had acquired in their homes from either payments made or an increase in the assessed value of the home. It was a booming industry and it quickly became overburdened by an abundance of loan officers and agents.
Now that the dust from the housing crisis is beginning to settle, the term ?refinancing? has become somewhat of a forgotten term. Yet, for any mortgage expert or loan officer, refinancing still factors into your success. Mortgage financing alone can add, on average, two to three percent to your total sales and while that number may not seem like a great deal, when you?re hanging on to your business with everything you?ve got, just trying to wade through the current mess, those two to three percentage points can make all the difference in the world.
There?s more to a mortgage refinance than just the commission
It is certainly easy to focus exclusively on refinancing as being a one-time benefit, for you as a loan officer, or the homeowner himself or herself. This is not the case, however. For you as a loan officer or mortgage expert, your business is built over time, on previous successes and repeat clients. When a homeowner seeks to refinance his or her home, they are looking to either improve their points, interest rates, terms, or tap into the equity in their home.
Odds are that in time, these same homeowners will be looking at moving at some point in the future, or will be looking to add on to their existing home, or have some other reason to come back to you for another refinance. As the industry seems to be settling in at its low point, with regard to home values across the country, it stands to reason that there is nowhere for them to go but up.
Before I hear back from all the people out there who will point out the obvious, yes, it still is possible that home values drop even more, especially in certain geographic locations. Home values will also be reliant on an overall economic recovery that is still in question at this point. However, historically speaking, it is clear that home values will continue to climb and gain value rather than lose value.
Which means that refinancing will once again be an important factor in any loan officer?s portfolio of sales. A positive refinancing experience for most people will also lead them to seek out the same loan officer and mortgage company when it comes time for them to buy a new home, or even a second or third one.
Being upfront and honest about refinancing is rule number one
It?s also rule number two, three, and four when you get down to the bare essentials. Let?s face it; the current economic climate has created an enormous amount of competition within the world of home loans and refinancing. The thousands of agents and officers who were dealing with more business than they could all handle are now scraping the barrel for anything to help get them through their own economic crisis.
Consumers are in control now, more than they ever have been in the past. Being forceful, pushy, or setting deadlines that don?t really exist is one of the easiest ways to lose business now. The homeowner can simply log onto the Internet, make a few phone calls, and check out the viability of someone?s sales pitch.
By being open and honest about home loan refinancing options, you serve two important purposes. First, you build a reputation as a reliable and honest provider. Word of mouth is a powerful tool in this industry. When your clients speak fondly of you and agents refer business to you, the only thing that can happen is your business will see a boost in its bottom line. Second, you help homeowners navigate the treacherous waters of refinancing, which, in turn, leads to a positive referral base.
Refinancing should not be forgotten as we hang onto any business that comes our way. While home values have dropped, some are back on the rise and that means there will be great opportunities for homeowners to refinance and get some flexible cash.