How to Handle Rate Shoppers As a Loan Officer

All loan officers get shopped sometimes. Borrowers are trained to call around and ask about rates. Those are just the facts. And you know what? It’s okay. Instead of getting frustrated about this reality, let’s put it in perspective. If you’re closing 25% of your referred leads, you’re good. Our goal doesn’t need to be zero clients rate shopping. The best loan officer on the planet doesn’t convert 100% of their leads. 

With a little balance, the right attitude, and working smart, rate shoppers won’t ruffle your feathers in the slightest. And they might even help you meet your goals.

Focus on Increasing Your Conversion Rate

I sat down with my friend, Kevin Gillespie, in Austin, TX recently to talk about rate shoppers and conversion rates. Kevin leads a group of branch managers in our Freedom Club. We call it the Branch Manager Academy. 

We both hear loan officers saying all the time, “I need more leads.” And most of the time, that’s not what they need at all. They need to convert more of the leads they’re already getting. Or they need to get their leads from sources that have a higher conversion rate. If you can just see a 10% improvement in your conversion rate, you can see a 50% increase in your income. We’re aiming for a 25% conversion rate overall.

There’s a difference between leads and referrals. We like them both, but we focus on referrals. For every 100 referred leads you get from past database realtors, referral partners, friends, and family, a 25% conversion rate means 25 loans. If you get 50 referred leads, you should be doing 10 to 12 loans, at least. If you’re getting 50 referred leads a month and only doing 6-7 closings, you’re behind, and you need to catch up.

Balance Is the Key

Nobody’s got the best rates. The key is in the balance. What three things do we need to juggle here? 

  1. fair compensation
  2. a fair price
  3. great support

If you can find a way to balance all three of these, you’ll be in great shape. This is how you’ll close more loans. Of course, it’s impossible to have all three at max capacity. You can’t have a high compensation for yourself, the best price for your client, and the best service. 

If you want great pricing that’s better than everybody else’s, you’re gonna lose somewhere else. Either your compensation or the support or the profitability of the company is going to suffer for sure. There’s not enough money there. Something’s gotta give.

Adjust Your Mindset

I said this at the beginning of the post, and I’m going to say it again, because it’s a tough one to get through our skulls. 

It’s okay that some people shop us.

It’s okay if we don’t win all the deals.

It’s okay if we don’t fund all the loans.

We have to focus on the big picture. Plug in the real numbers, see that you’re still helping a whole bunch of people, and just go get as many as you can. When I get focused on the wrong things, it can really mess with my head. Our heads are the most valuable real estate possible. Don’t give that away to people.

I’ll never forget, early in my career, when email was fairly new, and I was still figuring out loan officer marketing to realtors. I emailed a large group of real estate agents and got a frantic call from my team at my office. “Carl, we really screwed up. I wish we could pull back that email. Everybody’s opting out!”

“Everybody?” I asked. 

“Yeah, bunches and bunches!”

“How many?” I asked. “Too many to count? Give me an estimate.” 

Are you ready for this? They said around 20. Twenty people had opted out. We sent that email out to 16,000 people. Sixteen thousand. This person who called me was really smart. They just weren’t used to any opt-outs. It seemed like a lot as they were coming in, but as a percentage of 16,000 it was absolutely nothing. 

What to Say to Rate Shoppers

So, you’re going to have people shopping. You’re going to have people hang up and call the next guy. When someone does call you out of the blue and asks for your rate, remember first of all, this is what they’ve been trained and conditioned to do. They’re thinking ONLY about the rates, not about your compensation and the service you can offer them. Now, telling them how much money you want to make off of their loan isn’t the best tactic obviously. But you can absolutely talk up the service you’re able and willing to provide for them. That’s what will set you apart from the competition.

You want to build rapport and relationship. You want them to feel that you’re not only a friend, but an expert, and they can trust you and you want to educate them. And you want to add value. The more you can show that you’re adding value to them through this relationship, through education, through the services you provide, the less price concerns they’ll have. When they see value going up, price concerns go down. 

Borrowers in general are a skeptical bunch. And often with good reason. Maybe they’ve had a bad experience in the past with a lender. They think we’re just trying to reach into their pockets. They’re looking for value and security and they want us to develop that trust. 

What you need is a loan officer script that helps them understand you’re watching out for them. When they ask for your rate, you can say: “Man, that’s a great question. I’m so glad you asked that. Everybody asks that, but the truth is, rates are probably the third or fourth most important thing you should be concerned about. The most important thing is your goal or your game plan. What are you looking to get out of this mortgage?”

And then you go from there, slowly but surely building their trust.

Market To Your Past Database

One obvious answer to “How can I get borrowers to trust me?” is to work with clients who already trust you, because you’ve already worked together. Your past database is a gold mine, and so many people ignore it to their great detriment.

Your past database will give you the highest conversion rates of anybody, as long as it’s in their best interest. One of the biggest things you can do right now is talk to your past database about refinancing. If I’m not getting at least 25% refinances as part of my closing portfolio each and every month, that’s an indication I’m not marketing my database. I’m not helping those people when they need my help. They’re counting on me. I want to help them. 

If you’re not sure how to market successfully to your past database, let’s get you hooked up. Our scripts for mortgage loan officers are a hot commodity and proven to work. We’ll walk you through the exact strategies we use to market to our past database. And we’ll do it for FREE on a strategy call you can book TODAY. Don’t wait another minute. Let’s get you to 25% lead conversion RIGHT NOW.