A lot of credit unions have forgotten that good service requires helping someone. They, like a lot of mortgage folks, can get so focused on answering borrowers’ questions that they forget one simple concept: If it’s not helping, it’s not good service.
Answering questions usually isn’t the best help to your borrowers. Most people haven’t been educated in personal finance. When it comes to the biggest investment most of them are likely to make, few understand the intricacies of how a mortgage can impact their long-term and interim financial condition. They don’t understand enough about the nuances of a mortgage to ask the right questions. And few are offering them the guidance they need.
Most “service-oriented” loan officers invest a lot of energy responding to borrowers’ questions. That’s a shame, because borrowers tend to ask about rates, fees, monthly payments and APR –information that doesn’t shed insight on how their choices and actions regarding their mortgages will impact their lives. Just as financial planners shouldn’t limit discussions to hospital delivery costs when helping a customer plan their finances to raise a baby, loan officers shouldn’t be limited to discussing rates and monthly payments when guiding borrowers through the mortgage selection process.
If credit unions want to make a tangible difference in their members’ – and potential members’ – lives, they need to provide the information that borrowers haven’t been taught to seek.
Offer Choices
Borrowers need to be offered choices of different loan programs, and informed about the ways they can reduce their principal balances. Those choices need to be relayed in comparison to one another.
Ask your borrowers about their goals. How long are they planning on living in the home or holding on to the mortgage? How interested are they in paying their mortgage off completely, and in what period of time would they ideally like to reach that “freedom point”?
Your analysis of a borrower’s situation should detail the total cost of various loan programs over several time periods – that includes the total amount each program would cost at years one, five, seven, and so on. Show them how their principle balance will be impacted over certain time periods if they were to make regular principal-only payments. Your analysis should compare a variety of payment schedules, whether bi-monthly, monthly, quarterly and/or annual payments.
It’s a particularly good idea for loan originators to assist members’ families, like their adult children, with rent vs. buy analyses that demonstrate the total costs of renting vs. buying over several different periods of time and according to different loan scenarios.
Some Go Beyond
“All USE Credit Union mortgage specialists go beyond rate quotes when it comes to service,” said Shelley Duckart, a senior mortgage specialist with USE Credit Union in Davis, Calif. “We have an organization-wide standard of giving our borrowers the personalized attention they need, which ultimately means providing them with the specific financial tools they need to make the big decisions in life and achieve their own unique goals.”
“We focus on showing our members and borrowers how credit unions can be there for them, particularly in ways traditionally thought of as the purview of big banks and mortgage lenders,” Druckart added. “We need to demonstrate how competitive and sophisticated we are, and … demonstrating how invested we are in our borrower’s futures. We accomplish both by providing uniquely valuable personalized information that outlines exactly how our members can take better control of their financial lives through the mortgages they choose and the way they handle paying down their principal balances.”
Remember that presentation is part of service. Provide documents in a professionally prepared, easy-to-understand format, both online and in print. Your information should be accessible, easy to understand and professional. A lot of people have trouble deciphering their own notes. Don’t make your borrowers interpret yours. Use relevant charts and graphs. Customers should be able to access information at a moment’s notice, not feel like they’re analyzing an abstract painting. You don’t have to do everything by hand. There are plenty of technologies that make it easy to compare loan programs and present personalized, high-value information.
There’s only one way to differentiate yourself from the competition – and that’s by providing obvious, unquestionable value. By showing your members how they can take charge of their lives, you’re sure to keep them as clients.
