With the recent mortgage refinance boom disappearing and home purchases continuing to flounder, even though rates remain relatively low consumers are being very careful with the home buying decisions—which makes this purchase an increasingly valuable commodity for the credit union. It's more important than ever credit unions ensure their members aren't being swayed to another lender for long-term business.
According to a June 20, 2013, report from the Mortgage Bankers Association, the organization expects refinances in 2014 to drop by 60.1% to $388 billion, while purchase loan originations are projected to rise by 17.2% to $703 billion. This positive projection, however, is a double-edged sword for credit unions because a home loan is the number one product that could lure your members away from your credit union.
When members go to another lender for a home loan, they trust this institution with the biggest investment of their lives. They spend a long period of time working with them, becoming familiar with names and faces, and they find additional benefits to linking other financial products with their home lender such as ease in using their free accounts because their mortgage is also there. Your members quickly become a prospect of their home lender and quite often are sold on many other advantages, too.
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This vital piece of information regarding your home loan solutions is the necessity not only to provide home loans for your members, but offer them in a competitive way that will ensure member loyalty and commitment to your credit union for a long, long time. Here are four easy steps to ensure your members don't get lured away to the competition down the street:
1. Market
One of the biggest issues across the country in growing a home lending program is a lack of marketing. Members are not widely informed about credit unions offering home loans. As a result, they choose lenders they're familiar with, consult their realtor's connections or go to the person their friends or family used. Members need to think of their credit union first when the need arises and keeping messages of lending opportunities in front of them consistently is the way to do it.
Make monthly messages mandatory on the web, in your lobby or by direct mail. Also, make sure these messages stand out. For example, your members should find home loans on the first page of your website and not be required to hunt for more information.
2. Educate
Never before have members been so confused and so hungry for more information about home lending. They hear about it in the news and they know it's changed, but they need to understand what it all means to them and what to expect. Home buying seminars and other educational opportunities at your credit union provide you with a great opportunity to reach them with all the right information, plus it connects you to them when they do start the home buying process.
Don't just educate your members either. Make sure your staff knows how to handle questions about home loans, who to send leads to, and how to cross-sell this important product. Front-line education is vital to the sustainability of your home lending department.
3. Be All-Encompassing
Members not only want hzome loans, they also want flexible rates and terms, and a wide range of product options. They want to know they are getting the best deal for their money and they expect their credit union partner will do it. Your credit union can't afford to offer anything less than the very best line of products and options for your members or they will find someone who can. Review your product line today and ensure that you offer all the options your members need. If you don't, consider how you can better meet their needs.
4. Exceed Expectations
Borrowers more often choose their lender based on their availability than any other reason. What this means to you is that the member knows you are there for them, that you can direct them to the proper person, and you'll be the one they can count on to help them during the home lending process and after they close. Proper expectations must be set from the beginning and then when they are followed through, you must exceed them.
Wallace Jones is a vice president at CU Members Mortgage. He can be reached at 1-800-607-3474 or [email protected].
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