As we enter 2019, it's important to look at historic trends and macroeconomic conditions to understand how to win in today's changing mortgage market.
Even with rising interest rates, mortgage applications rose 23% in January — and we are headed into the busiest season for mortgage companies as new home sales historically climb 10% each month from February to June. Driving this demand are digitally savvy Millennials, who make up the largest cohort of new homebuyers, which may lead to more business from new home purchases rather than from refinancing. And this comes at a time when the market is even getting more competitive: Today, more than half of the mortgages sold come from non-traditional banks, like Quicken Loans and LoanDepot. To win in this environment, you need to think big, act fast, and tailor your business to acquire new homebuyers.
In a recent Yext study, we found that search (e.g., Google, Bing, Yahoo) is the starting point of the Millennial home-buying journey — and that reviews heavily influenced their buying decisions. Over 90% of millennials have a smartphone, and one in four spends more than five hours a dayusing one — so optimizing for mobile is a must. In this digital arena (with new home inventory at a 20 year low) the homebuyer journey has changed radically. Here's what mortgage loan officers (MLOs) need to know about the market to win in 2019.
The customer journey is changing
The National Association of Realtors® reports that 90% of all homebuyers search online for their home. For 42% percent of that group, the internet was their first step in the homebuying process — before contacting an MLO.
Previously, prospective homebuyers searched online, clicked several links to your website, then transacted by either looking up an MLO to call, or by filling out a form to schedule an appointment. But customers no longer see a simple list of blue links when they initiate a mortgage search. Today, search engines provide a direct answer to the homebuyer — and mortgage brands need to understand how to be that one answer.
Here's an easy test:
As an MLO, go to Google and search for your name.
Do you see your picture, with a phone number, your work address, and a link that points directly to your profile page?
If you're missing any of these key elements, then you are at a serious disadvantage when it comes to driving new business.
This shift will only accelerate as voice search skyrockets. As such, executives need to factor this into their strategic plans and investments. The customer question is no longer "where do I buy a mortgage?" Today, it's "find the best MLO near me who specializes in JUMBO Loans and speaks French."
Yext findings indicate that a customer now interacts with 8.9 different experiences before he or she is ready to transact — so you can't simply rely on your website.
The traffic is starting on maps, apps, and AI-driven discovery services, and it's allowing customers to transact by scheduling an appointment or applying directly from search results. So you must ensure you have consistent information and comprehensive business details in all the places your customers are searching. Otherwise, they'll never discover your business in the first place.
Reviews are the new referral
Discovery via maps, apps, and AI-driven discovery services is only one piece of the puzzle. Historically, a typical customer journey might have moved from homebuyer research, to consideration of different mortgage companies, to starting an application process, and eventually to closing on a home. Today's customers are choosing different paths. They are fact-checking mortgage companies and MLOs. It's a race to close on new homes with the shortage of inventory as houses get snatched up as soon as they hit the market. Because of this, customers want to make sure they are working with MLOs and mortgage companies who can move quickly and get them the best rate. This is why reviews are playing such a critical role. In fact, according to Yext research, 87% of consumers won't consider a local business with a low star rating — and mortgage is very much a hyper local competitive business.
Other research indicates that 84% of people say they trust online reviews as much as friends. This applies to the mortgage industry too, of course, with customers today likely to trust reviews over referrals. Because of this, it's important to measure your reviews versus your competitors' in these local markets. After all, when someone searches for "best MLO" or "best mortgage company," this best term is powered by reviews.
To build up your review presence, simply start asking for them. 70% of consumers say they will leave a review if asked to. As a best practice, consider asking for reviews after the application process is completed.
Mortgage is a hyper-local competitive business
There are several ways to get your brand into the market, and it's important to register with and update your business information across Google, Facebook, Yelp, and the many other digital services consumers are using every day to search. Focus on name, address, phone number, links to your website, and office hours.
Finally, remember to consider the end-to-end customer journey. Try starting from different publishers and see if customers can seamlessly navigate to your business profile. Try searching for best mortgage officer near me — and you can even try this from different important neighborhoods. Mortgage organizations that arm their MLOs with the right digital tools are much more likely to recruit, retain, and see their home lenders succeed. This is why eConsultancy's Digital Trends Survey listed the home lenders digital journey as a the top priority for executive teams.