Want to Thrive Like a Top Producer During this Refinance Boom? (Be Proactive!)

In Tim Braheem’s latest video, he mentions that he was inspired by the words of Barry Habib, a well-known mortgage loan expert, who recently spoke at a Leadership360 conference. Habib predicted that mortgage rates will most likely fall to “the lowest they’ve ever been” within the next 12 months, which provides a huge opportunity for clients to refinance their loans. However, Tim stresses the fact that loan officers must start preparing for their futures now if they want to take advantage of this upcoming refinance boom. Here are the tips he recommends for setting yourself up for success:

Recognize the Signs of Economic Slowdown

There’s a high probability that, within the next several months, the economy will slow down, the yield curve will normalize, and rates will go down accordingly. He explains that if he were still personally involved the loan origination business, he would already be planning for this anticipated drop in interest rates.

If you’re not sure whether or not a drop in mortgage rates will actually occur, it can be helpful to take a look at the data collected over the past few years. According to The Mortgage Reports, mortgage rates are already beginning to line up with Habib’s and Tim’s predictions. In 2016, the average annual rate was 3.65%, and it rose to 4.54% in 2018. Since the start of 2019, the average rate is 4.24%, and this number continues to decline.

The evidence of a slowing economy extends beyond just mortgage rates, though. The LPL Financial Research Conference Board publishes a Leading Economic Index (LEI) every month that looks at a variety of factors to gauge how well the overall economy is doing. Based on recent reports from LPL, the LEI is only up 2.7% since a year ago; and it may decrease by the end of 2019.

In other words, there is plenty of evidence that the next 6-12 months will provide you with a number of opportunities to help your clients refinance and improve your own business along the way.

Get a Head Start

Ideally, you have to connect with your clients and obtain their verbal consent to find them a refinancing offer before the market changes. If you wait to contact them until interest rates actually drop, you’re probably going to be too late. As Tim explains, the window of opportunity can be terribly small, so not being proactive can often be disappointing for those who don’t plan ahead.

Rather than waiting for the market to shift before talking to clients who are eligible for refinancing, be proactive by following these tips instead:

• Start running tests now. In your existing client database, start to figure out who will be eligible for refinancing if basis points drop to 50, 75, and so on. As you go through your tests, make notations in your database to mark who should be contacted.
• Make 1-2 calls per day. Choose 1 or 2 clients everyday and let them know that they might have a chance to refinance in the near future. Be clear that these rates aren’t currently available, but there’s significant evidence that there will be a drop in mortgage rates in the next several months. Once you’re sure they understand the situation, ask if you can have their permission to find a lower rate for them as soon as an opportunity arises.
• Refine your script. Tim states that 9 times out of 10, clients will say yes to refinancing their loans and getting a better deal. As you continue to find eligible clients, rehearse your script to explain the situation clearly and to make people feel excited about this upcoming market shift.
• Create a complete list of people. Compile a list of all your eligible clients so that you can start completing paperwork right away when the market changes.
• Lock in new loans. Keep a careful eye on the market, and as soon as interest rates drop, you can start locking in several new loans!

With a bit of foresight and some extra planning, you can win the increased loyalty of your clients and improve your business as soon as the refinance boom occurs. If you’d like any further info about how you can boost your success, feel free to check out our free resources and additional advice posted on our blog!