Mortgage rates change every day, and those changes can have big effects on borrowers. Over the last year, it seems like most of those changes have taken an upward trajectory, but there are times when monitoring mortgage rates means good news, like the rate dropping from 7.37% on November 9 to 6.67. % on November 10.
So how and how often should you communicate rate changes to your borrowers?
Jack Skovgard, a broker at Long Beach Home Loan Corp., said the first thing he looks at each morning is what’s happening with mortgage bonds and the price of rates compared to the day before. Depending on that margin, he said, he decides whether to call clients and update them on the prices of the rates.
It’s important to update borrowers who are going through a refinance or who are in some stage of the buying process fairly regularly about movement in the market, but especially when something big happens.
“I don’t want to be a broken record saying, ‘Oh, prices are better today, oh, prices are worse today,’ because none of that really matters unless you can secure a loan that day for that price,” Skovgard said. . .
It is not helpful to inform borrowers of a rate they cannot get unless they are ready to secure a loan at that time. It usually adds more stress to the process, since there’s nothing a buying customer can do to get their offer accepted faster.
making the call
Skovgard said the reason it communicated the November 9-10 rate drop to its borrowers was because it affected the approval of many of its clients who are currently looking for homes.
Those calls involved updating borrowers on the drop in prices and what that means for their loan scenario. He provided numbers on how they could increase their buying power and what their new payment would look like based on the price drop.
“Just good information for people who are actively in the process to have it and work with it,” he said.
He also noted that he wanted to communicate with borrowers about rate drops as soon as possible because that type of rate change can quickly become national news, and it’s important that they hear about him as an expert they’re using for the buying process. of housing. .
“I think it helps them build trust in the relationship to hear from me first and then hear about it from neighbors, friends and online sources after the fact,” she said.
Communicating with Borrowers
So how should you communicate rate changes to your borrowers?
First, try not to get too deep into the inflation data and the details of why prices may have improved. Clients rely on the expertise of their broker or LO to help them navigate through the process, rather than trying to dig into the details of inflation and rate data themselves. The goal is to help them take advantage of the best possible lending scenario by predicting and explaining how prices may change in the future.
“We think it’s better to always make phone calls; either good phone calls or tough phone calls,” Skovgard said.
For clients who are about to get an accepted offer or those who have just received an accepted offer, be sure to have a direct conversation about locking up your loans and your rates before doing so. Some customers may choose to heed the advice and others may choose to float their locks and not lock them yet ahead of time or wait for a better price.
“It can be a gamble if you do that, so I try to give my best advice to the client,” he said.
Communication with borrowers is key, especially in a business built on trust and referrals.
“It’s my job to inform borrowers where the price is, lead them to the best decisions that I think should be made, and leave them, as my client, to ultimately make the decision whether or not to rate the loan,” he said. Skovgard. “I can give my best advice on what I think they should be doing based on my experience.”
Your goal should be to position yourself as a trusted expert to your borrowers. There are a variety of ways to do this, including through your communication methods and continuing your education through podcasts and other means.
You can keep an eye on mortgage rate changes by visiting HousingWire’s Mortgage Rate Center here.