Refis dwindle when rates rise -- but that doesn't mean you should ignore them
Part II -- If rates go up this year, should I abandon any plans to originate refinances? It just seems like purchases will dominate the markets.
--Jake from New York
Last week we discussed the different types of refinances which will take place in a rising rate environment. We also introduced the ideas of diversification and synergy which help us understand that refinances can lead to purchases and purchases can lead to refinances. It is this concept which we would like to expand upon today. How can a refinance lead to purchases? To answer this question, you must be willing to delve into the sphere of a refinance transaction.
What is this sphere? It is comprised of the contacts you can touch during the transaction. For example, what real estate agent helped the applicant purchase their home? Assuming they speak highly of that agent, you could ask if they want you to keep the agent updated with the fact that they are refinancing, and also with their permission, let the agent know the appraised prices of the property. Imagine an agent who, on the same day, is chasing a loan officer for information on a loan they referred. Now you call and give them status on a transaction they did not refer. You think that might positively differentiate yourself from the competition? Isn't this better than a cold call to an agent?
Of course, perhaps the agent referred you the applicant to begin with. You won't get an introduction to a new agent in that situation, though you could still give status. But this brings up another point we will go over next week.
--Dave Hershman
Dave Hershman has been the leading author and a top speaker for the industry for decades with six books authored and hundreds of articles published. His website is www.originationpro.com. If you have a reaction to this commentary or another question you would like answered in this column? Email Dave directly at [email protected].
--Jake from New York
Last week we discussed the different types of refinances which will take place in a rising rate environment. We also introduced the ideas of diversification and synergy which help us understand that refinances can lead to purchases and purchases can lead to refinances. It is this concept which we would like to expand upon today. How can a refinance lead to purchases? To answer this question, you must be willing to delve into the sphere of a refinance transaction.
What is this sphere? It is comprised of the contacts you can touch during the transaction. For example, what real estate agent helped the applicant purchase their home? Assuming they speak highly of that agent, you could ask if they want you to keep the agent updated with the fact that they are refinancing, and also with their permission, let the agent know the appraised prices of the property. Imagine an agent who, on the same day, is chasing a loan officer for information on a loan they referred. Now you call and give them status on a transaction they did not refer. You think that might positively differentiate yourself from the competition? Isn't this better than a cold call to an agent?
Of course, perhaps the agent referred you the applicant to begin with. You won't get an introduction to a new agent in that situation, though you could still give status. But this brings up another point we will go over next week.
--Dave Hershman
Dave Hershman has been the leading author and a top speaker for the industry for decades with six books authored and hundreds of articles published. His website is www.originationpro.com. If you have a reaction to this commentary or another question you would like answered in this column? Email Dave directly at [email protected].
