Podcast
Questions and Answers
Why is it important to proactively report bad news to borrowers?
What is the common denominator in both scenarios mentioned in the text?
What happens if you don't communicate with your borrower as interest rates are climbing?
What does the video suggest about the psychology involved in selling loans?
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How can loan originators create a psychological impact on their clients?
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Study Notes
The Psychological Definition of a "Good Rate"
- Loan originators often fail to inform consumers about rising interest rates, which can lead to missed opportunities for refinancing.
- Loan originators should make the effort to inform consumers about rate increases and create a sense of urgency.
- By highlighting the potential savings that could have been achieved with a lower rate, loan originators can make consumers feel the pain of missed opportunities.
- Loan originators can establish a verbal contract with consumers to set a target rate for future refinancing opportunities.
- It is important to emphasize the financial cost of not taking action, such as the additional $2,000 per year in mortgage payments that could have been saved.
- Loan originators should also focus on conditioning consumers to higher rates in order to reset their definition of a "good rate."
- By regularly notifying consumers of rate increases, loan originators can create a sense of pain and regret, leading consumers to reconsider their definition of a good rate.
- This proactive communication strategy prepares consumers to appreciate lower rates when they become available in the future.
- Failure to proactively communicate rate increases can result in consumers maintaining an outdated definition of a good rate, which may hinder future refinancing opportunities.
- There is a psychological component to the selling process in the mortgage industry, and proactive communication of both bad and good news is crucial.
- Loan originators should take the initiative to report bad news, as it provides an opportunity to share good news when it becomes available.
- Understanding the psychology of interest rates and effectively communicating with borrowers can lead to more successful refinancing and purchasing transactions.
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Description
Test your knowledge on the psychology of interest rates and how it relates to refinances and purchases. Explore the definition of a "good rate" and the critical mistakes loan officers often make.
