Mortgage Lead Generation
Mortgage lead generation is quickly becoming a hot topic for mortgage lenders and brokers as they look to new ways to acquire customers in the digital age. Traditional mortgage marketing models are changing as consumers change the way they wish to engage with mortgage originators. Purchasing leads from lead aggregators and referral partner marketing continue to produce great results for some originators, but how do you get started generating your own mortgage leads while promoting your own brand? Let's discuss alternative ways of generating your own inbound marketing without the need for third-party lead sources.
Mortgage Purchase Leads
Mortgage purchase leads are important in your lead generation strategy because they are much less rate sensitive. Purchase leads generally take longer to cash flow due to the fact that a customer needs to both get pre-qualified and shop for a home. In a low inventory seller's market, this increases the time it takes for a consumer to find a home. Still, mortgage purchase leads should be a big part of your mortgage marketing strategy because, with a good nurturing program, purchase transactions can keep your business sustainable through interest rate and low margin cycles.
First time home buyer leads:
Here are the 2 main reasons you should target first time home buyers as part of your lead generation strategy. First time home buyers are highly responsive to marketing. A higher percentage of first time home buyers don't have a preferred lender or agent. This gives you a great opportunity to get in early with a homeowner and possibly get a customer for life.
A mortgage originator that is new to the business can build relationships with first time home buyers easier than tapping into a referral partner network.
How to monitor prospects from your referral sources.
Listing leads are leads generated from an existing homeowner listing their house for home or rent. Our own research show that approx. 50% of homeowners list their homes prior to getting pre-qualified for their next purchase. Listing leads are best when generated from your own database monitoring. If you have a prior relationship with the homeowner you have a better chance of retaining their business rather than the consumer going with the agent's preferred lender.
Related Article: What is a Pre-mover Alert?
Mortgage Refinance Leads
Mortgage refinance leads are the easiest to convert on a direct-to-consumer model. Mortgage refinances are less dependent on a local presence and they can close faster than purchase business. The downside to mortgage refinances lead generation is that the deals are very much interest rate dependent. You will need a good strategy of targeting consumers that meet a net tangible benefit before they will go through with the refinance. A good strategy for originators is to have a mix of purchase business and refinance business when building a mortgage lead generation strategy. Quicker closing refinance transactions can help cash-flow the longer cash-flow cycle of their purchase business pipeline.
Cash-out refinance leads:
Cash-out refinances are popular in a market when homes have appreciated. Paying off credit card debt, small business loan funding, and home improvements are a driver of a cash-out transaction. When generating leads for cash-out transactions, keep in mind you are competing with home equity lines. A home equity line is generally much less paperwork than a full cash-out mortgage transaction. You will want to have a strategy for targeting consumers that are less likely to meet the industry's criteria for a home equity line of credit.
FHA streamline leads:
FHA streamline leads are a favorite for most direct-to-consumer operations. They require less documentation from the borrower and they don't require an appraisal. When interest rates permit FHA streamlines are very popular. The flip side is that FHA streamline candidates get the most marketing pressure from lenders when interest rates are low. Again you will need a good net tangible benefit model and unique marketing to stand out in their inbox.
VA refinance leads:
VA refinances have a couple of benefits. The 100% VA cash-out option means the transaction is less dependent on the appraised value like other 85% cash-out products. The VA IRRL is similar to an FHA streamline which requires less documentation and can be down without an appraisal.
Database marketing leads:
Database marketing is a newer approach to mortgage lead generation. Marketing to your own contact database is one of the least expensive ways to generate new transactions because you already have a prior relationship with the homeowner. Consumers that have some level of engagement with you in the past can be up to 5 times as responsive to your marketing than a consumer that has never engaged with you or your brand. Your contact database may include past clients, previous credit denials, prospects that applied but may not have completed a transaction with you, or anyone in your sphere of influence. For more info on how we can help you leverage your own contact database, see what are database monitoring alerts and how should I use them?
Mortgage email marketing:
Email marketing will help with your multi-channel marketing approach. Email marketing is effective when marketing to your contact database as opposed to purchasing an email list of consumers that don't recognize your brand. Also, drip marketing email campaigns can be effective but you should be cautious on your approach. Sending drip emails to your contacts in your database that aren't in the market for a mortgage can get consumers in the habit of overlooking your emails so they are less likely to respond when the time is right in their home buying cycle. Read more about why some mortgage marketing drip campaigns do more harm than good, and what to do about it. Our database monitoring product automates the delivery of personalized marketing emails to your prospect database when the consumers are most likely to be in the market.
Mortgage mailing lists:
Although direct mail marketing may seem outdated, it continues to produce a measurable response rate when done properly and with a good targeting model. Prescreening mailing lists is a good way to eliminate mailing costs to consumers that don't meet the criteria for your products at that time. The prescreened mailing also gives you the most accurate set of demographics and credit attributes to target consumers that meet the criteria for your specific loan programs.
Mortgage trigger leads:
Mortgage trigger leads are leads for consumers that have just applied for a mortgage with another lender. Mortgage trigger leads can generate both refinance and purchase business as an inbound marketing strategy. In many cases when a consumer applies for credit with a lender, they are very early in the mortgage process. Many times a mortgage credit trigger can be generated from a consumer applying online with their bank or even a lead aggregator. The reason mortgage trigger leads are so popular is because most consumers want to shop multiple offers prior to selecting which lender they will complete a transaction with. Mortgage credit triggers can also be effective for mortgage lenders with niche products that the consumer may have been turned down for when applying with the first lender.
To learn more about how MonitorBase can help with your mortgage lead generation strategy reach out to our sales team.