The mortgage business is so commoditized that it’s easy to focus on price as a difference maker – but if you’re a mortgage broker or correspondent that picks a lender based solely on its cheap rates, it will likely cost you big in the long run.
Customer satisfaction is what really matters the most. A great rate and low fees are certainly a big part of customer satisfaction, but they’re not the only part. There’s a balance between rate, fees, service, closing time, and efficiency.
What’s important to a loan officer is that they close loans in a fast and hassle-free manner, deliver a great experience that encourages referral business, and that real estate agents want to work with them again. But if a loan officer puts all of his or her eggs in the pricing basket, they won’t be able to deliver on all the other things.
If a homebuyer is amazed by the level of service they received throughout the process and can’t wait to refer a friend or cousin to the loan officer, that’s a win for the loan officer. But if they walk away feeling like the process was a pain in the butt even though it saved them $6 a month, that’s a loss. An unhappy client doesn’t give any referrals. People won’t remember the $6 every month that you saved them, they’ll remember the experience they had.
It’s a similar mistake that consumers can make when booking hotel rooms. Customer satisfaction at a hotel isn’t just tied to the room rate. There’s a good chance that the cheapest hotel also delivers a lesser experience overall. Maybe it’s a place that has bad food, or it takes 30 minutes to check in, or the towels feel like sandpaper.
The sentiment is the same in the mortgage business when loan officers ignore other factors and choose to send loans to lenders based on their pricing alone. One wholesale lender might be the clear frontrunner because of their rate sheet, but rate sheets don’t describe the full loan experience. There’s more to it than meets the eye. The cheaper lender with cheaper rates often delivers a lesser quality experience for brokers and their borrowers. It probably has more expensive mortgage insurance, higher appraisal fees or slower closing times.
Whether you’re talking about a hotel with a comfortable, convenient living arrangement or a mortgage process that is hassle-free and closes fast, focus on the experience – not just the price.