While we don’t have a crystal ball, and no one can say with certainty what the next twelve months will bring, here are some thoughts on these topics from across the industry. What trends do we expect to see in the coming year? What are consumers looking for? Where is the best opportunity for growth in the mortgage business?
No Definitive Rate Predictions
Some experts believe that the Federal Reserve may finally raise the benchmark interest rate above its current level at close to zero as early as next month’s meeting. Many others think they won’t. An 11/29 article from CNBC reported on the results of a survey of 51 CFOs in Europe and Asia at some of the world’s biggest companies, showing that just 50 percent believed a rate increase was coming in December. If the financial bigwigs are so evenly divided how are consumers to know when to expect a rise?
We know rates are historically extremely low now. No one expects a large decrease, and most financial analysts predict an increase – it’s just a question of when. For home buyers and owners, this seems to signal that it’s a good time to borrow, and if low interest rates are the priority there’s no time like the present.
A Focus on Purchase Business
There will always be reasons to refinance that aren’t rate driven – to take cash out for other purposes, to lower the monthly payment by changing the loan program or term, or to pay off the loan sooner by moving to a shorter term for example. Still, with interest rates not expected to move dramatically lower a 2016 refi boom seems unlikely. To keep the pipeline full with fewer refinances taking place it’s important to be ready to accommodate as many purchase clients as possible. Expand product offerings and have solutions such as renovation loans, manufactured home mortgages, and government loans available.
Connecting With Consumers Online
Technology continues to play an ever increasing role in home buying and financing. According to the National Association of REALTORS® 2015 Profile of Home Buyers and Sellers, “among all generations of home buyers, the first stop in the process is looking online for properties for sale.” And it’s not just browsing through listings where smartphones and computers come into play. Consumers research home buying and mortgage financing, search for real estate agents and mortgage professionals, check current mortgage rates, complete applications, sign disclosures, and much more.
By embracing technology you can both make the experience easier for existing clients and find new ones. Participate in and advertise on social media networks such as Twitter, Facebook, and Instagram. Communicate with your clients however they prefer whether that is by phone, email, or even text. Make use of eSign and eConsent to deliver documents and disclosures.