How to stay ahead of the curve in a rising-rate market

April 27, 2022

Refis and conventional home purchase loans provide mortgage brokers with a steady stream of business when rates are low, but what about when they aren’t? To top things off, a historically depleted national housing inventory is creating real difficulties for Americans looking to buy this spring. Couple that with rising mortgage rates, and you have a recipe for a tricky situation for buyers and mortgage loan originators (MLOs) alike in 2022.

The realities of today’s housing market appear harsh at first pass to a loan seeker. But when looking at it from a different perspective, these difficulties have also opened the door to some exciting and creative opportunities for MLOs who stay ahead of the curve. With conventional programs no longer fitting the needs of so many projects and purchases, pursuing additional specialty certification along with offering unique home loan educational resources are paving the way to a brighter lending landscape.

MLO Resources

So what can you do today to help future-proof your brand and business for any curveballs the market may throw? Two big opportunities that can solidify your value to a buyer no matter what the market does are 1. Becoming a trusted advisor on topics that will shape clients’ home-buying experience, and 2. Offering specialty loan options tailored to the realities of the market.

Provide Buyers with Home Loan Education Tools

Helping a client or prospect become more knowledgeable on home loan topics is a gift that keeps on giving. Arming a buyer with the information they need to make smart financial decisions is a critical offering that breeds trust and can establish you as a go-to source for future loan originations.

Since higher credit scores generally translate to lower rates and better approval odds, it’s always a good idea to advise clients to minimize and pay down high-interest debt like credit card balances using strategies such as the “debt avalanche” or “debt snowball” approaches.

Another strategy for improving credit scores — for people who are not going to be applying for a mortgage in the near future — can be counter-intuitive to many consumers. This approach entails applying for an additional credit card. What this does is lower the person’s credit utilization, which can have as big an impact on their credit rating as paying off debt in the first place.

Of course, if a person is going to be applying for a home loan soon, they should not apply for other types of new credit such as a car loan or the aforementioned credit card.

Prepping for college is another major financial decision that all too many Americans step into wearing blinders. This ancillary fiscal area can have a major impact on someone’s ability to buy a home down the road. Almost half of undergraduates carrying student debt have plans to delay the purchase of a home (Clever). Presenting your clients and prospects with smart college planning resources has the likelihood of paying dividends down the road.

Pursue Certification in Specialized Loan Products

If you’re finding yourself with a little more downtime due to market conditions, it’s a good idea to use some of that time to improve your skillset and knowledge base.

AFR Wholesale offers a plethora of on-demand and live webinars to help MLOs understand the ins and outs of specialty loan programs and other home loan options that can fill the gap when refis dry out. We have courses on One-Time Close Loans — a flexible, construction-to-permanent loan product that allows borrowers to defer their payments until after construction is completed. Other course topics include Renovation Loan options that factor in the projected value of a project and the DPA Advantage program that can secure government grants for qualified home purchases by eligible borrowers.

All of these resources are accessible to you 24/7, so you can review or participate as your schedule allows. While you don’t have to accomplish certification for this educational journey to be worthwhile, an AFR certificate of achievement and digital certification badge can certainly open new opportunities for savvy MLOs.

Staying Ahead of the Curve Helps You Stay in Front of the Competition, Too

There’s no denying that the real estate game has evolved rapidly in the last couple of years, presenting unique market conditions that we haven’t seen in decades. As a result, MLOs who stay on top of their client offerings are in a great position to capitalize. If this market has taught us anything, it is that this industry is unpredictable at its core. Fortunately, there are powerful tools and resources that let buyers close on the loans they deserve in a challenging time — and help you bring more families home.

To expand your knowledge and stand out from competitors in this unique housing market, take a look at our full list of webinars as you consider pursuing certification, explore educational resources that can give your clients a leg up in the market, and as always, feel free to contact AFR for more.