There are many key metrics to consider when deciding how to spend valuable marketing dollars. The acceptable cost per loan funded depends on where a person is in the organization chart and how much a stakeholder is involved in the long-term growth of the company. Successful lead generation companies are aware of this and for this reason, their products are tailored to different segments of the professional mortgage population.
A mortgage banker will try to increase the volume and can tolerate lower margins. He immediately sees the advantage of increasing the total lead volume. Costs per loan financed from $ 400 to $ 700 per loan financed are acceptable and very profitable as the bank generates revenue from the loan taken out in more ways than one.
However, they can be divided into two basic categories: 1.) Wait for a qualified older homeowner to come through your door with you and request the product from you, or 2.) Market the target group in a clear and informative manner and share it with them this with product is available.
Waiting in the office for warm recommendations: Lowest cost per loan financed
It is easiest to rely on recommendations from previous customers. In the reverse mortgage industry, this would mean simply waiting for someone who has previously taken out a reverse mortgage to go to a friend or family member and highlight the benefits.
Ideally, they have excellent comments about the company that provided the loan and the benefits of the loan. In this scenario, the cost per loan financed is almost zero and the profit margin associated with the loan is high. The disadvantage of being completely dependent on warm recommendations of this kind, especially for growth-oriented companies, is easy to see.
First, older homeowners tend to keep financial matters private and may not discuss financial matters openly. Second, for many seniors, the personal network of trusted people is shrinking rather than growing every year. Third reverse mortgages have been available for decades in one form or another and before the massive increase in property values associated with the property bubble, which significantly reduced the value-added of many properties and greatly increased available equity.Few loans were granted as the primary means of communication was.
Growth-oriented companies, especially those with an exit strategy that involves buying through a larger company or group of investors , need more than just getting started to build their businesses. Even large banks and financial institutions market their agents heavily in the communities.
Anyone familiar with the reverse mortgage industry understands that the eventual sale of the business unit or portfolio is an essential feature of business plans. The portfolios developed by Home Equity Conversion Mortgage and Fannie Mae Homekeeper Originatoren have a value in the securities market that is higher than that of many traditional mortgage products, as the loan itself is state-insured to protect the lender and the homeowner.
Marketing is a business expense and as long as the returned revenue exceeds the cash outlay or the credit obligation, the result is positive. Marketing is one of the key components of a successful business, and marketing has a significant impact on the performance of salespeople.
Organizations with 15 or more agents who take reverse mortgages on a daily basis must ensure that their agents are constantly supplied with a steady stream of leads to follow up with and forecast the future performance of their sales reps. A sales team without leads is doomed to fail. A sales team with leads has a chance. And a company with a low cost per loan financed is more profitable.
When it comes to reverse mortgages, not all states are the same. States like North Carolina have much less competition, while California, which has had the most reverse mortgage transactions, has the most competition. The recent changes in the traditional mortgage market and the impending financial crises that the Federal Reserve is working to avert have made it very difficult to operate in large volumes in many states due to the significant changes in estimated property values.
The challenges that brokers and lenders face are also faced by the lead generation companies they use, and prices are set accordingly. A lead in North Carolina or Georgia is chargeable because the marketing companies have to spend less to produce the type of lead product that the customer needs. The leads in California or Maryland, on the other hand, require more marketing effort for the production. In California, the cost per loan financed could easily be $ 800, unlike North Carolina or Idaho, where the cost per loan financed could only be $ 400.
If your company is able to operate in multiple states at the same time, it is a good idea to distribute marketing spending among the states so that the total cost of your lead program is weighed against known factors such as penetration by market size, new market opportunities, Average available equity for eligible homeowners, credit limits and governmental requirements.