If you occasionally wonder how many online borrowers are out there, check out Fannie Mae’s recent report, “Technology Use in Mortgage Shopping.” While the study results focus primarily on the differences between high-income and low-income borrowers, what caught my attention was the overall growth in online mortgage activity that was cited in the report.
For example, among borrowers who got a mortgage within the past three years, more than half—51%—looked for a lender online. That’s a jump from 35% of borrowers who were seeking a mortgage more than three years ago. More interestingly, perhaps, was that 46% of recent borrowers obtained a mortgage quote online, up from 29% among borrowers three years prior.
Considering that spring home buying season is upon us and that this year’s purchase loan volume is expected to rise (albeit modestly), I feel it’s safe to assume we will see a record number of online shoppers in 2014. If you haven’t considered online leads as part of your sales strategy before, here are a few thoughts to consider:
The leads are getting better. In the past, online leads did not convert well because of their poor quality, but this is changing. Lead providers like LendingTree, Zillow and others have improved the quantity and quality of data they collect from potential borrowers. Lenders today can buy online leads that include everything from a borrower’s credit score to a host of other data that can be used when it’s time to start the application process.
Online leads keep pipelines full. Even a veteran loan officer, with a large database of customers and a strong referral network can still experience the occasional drought in sales. By supplementing your team’s current lead generation efforts with a steady supply of online prospects, you’re assuring that everyone has plenty of selling opportunities and the business is operating with maximum efficiency.
The technology is accessible. The tools required to buy, aggregate, score, distribute and respond quickly to online leads are no longer affordable to only the largest financial services companies. In fact, if I was running a retail mortgage shop, I would use a lead management platform to add a front line, consumer direct capabilities to my business. My reps could make initial contact with online prospects to get the ball rolling, and then distribute them to the loan officer who is most likely to close the deal. In fact, some lenders are already following this strategy.
A word or two of caution about online leads: The whole reason borrowers shop online is to save time. Today’s “Generation Y” or “Millennial” borrower is unlikely to walk into your branch office to apply for a loan, and when they go online, they won’t be willing to wait days or even hours for a response. They want help now and you’ll be judged on how quickly you respond.
At the same time, online borrowers can require just as much nurturing as any other prospect. Don’t discount online leads just because a prospect isn’t ready to pull the trigger right away. The trick is to respond fast and stay with them. For this reason, technology that helps lenders qualify, distribute, respond and follow up to leads quickly and consistently is a crucial piece of your online lead strategy.
If you’re thinking about how to go after the coming surge in online leads, keep Fannie Mae’s survey in mind. Nearly half of your potential customer base is looking online. Are you?
Kelly Booth is the director of the mortgage unit at Velocify, bringing more than 25 years of experience in sales, marketing, management, strategic planning and product design in the financial software industry. She possesses a solid understanding of the mortgage and banking industries, the overall mortgage lifecycle and the technologies that support the loan process.