Zillow is predicting 2.5 million new households will enter the housing market in 2021. In contrast, the MBA predicts that refi’s will reduce to just 24% of origination volume by the end of 2022. As mortgage rates rise and refinance volume drops, originators who are prepared to nurture their pipeline to harness the still robust purchase market will be in a better position to have a successful 2021.
The average industry lead to closed loan pull-thru rate is 5-7%. If you could close 10% or 15% more leads by keeping your potential homebuyers engaged with your brand while improving their mortgage eligibility, your 2021 would be looking great.
Let’s take a look at some general figures, acknowledging your business may vary with volume and bps.
- Originator commission base: 25 loans per year at $300,000/loan x 105 bps ($3150) = $78,750
- Increase annual closed loans by 10% (2.5 loans) = $86,625 commission
- Increase annual closed loans by 15% (3.75 loans) = $90,562 commission
We all know that advising first-time homebuyers how to improve their credit score and reduce their DTI, while educating them on the mortgage process takes time. And that’s just to get them financially ready to qualify for a loan. Then there’s the ad hoc gathering of documentation and entering them into your LOS for their application, all the while hoping this application won’t be the 1 in 10 that gets denied during underwriting.
Wouldn’t it be easier to give each new lead a high-tech, high-touch app branded with your company name that would get them mortgage-ready and streamline your document gathering for underwriting?
FinLocker is a consumer financial relationship management platform that helps originators manage a larger pipeline by guiding homebuyers towards mortgage readiness using tools and resources in the FinLocker app to improve their credit score, save for their costs to close and reduce their DTI. Originators need only to check in with their homebuyers once a month to keep them motivated towards their goals and hear their progress. FinLocker has a mortgage readiness assessment that is regularly updated with their financial data, so the homebuyer can quickly provide the originator with a realistic update of their progress while on the call.
To streamline the mortgage application process, homebuyers can upload their financial documents (according to the list provided by their originator) to their FinLocker account and share them directly with their originator when they have reached their mortgage readiness goals. The data and documents are transferred to the originator’s LOS, reducing the risks often associated with document procurement and processing.