| One of the most common objections a loan | | | | the phone. I tell them that I am very serious |
| officer hears is "Your fees are too high!". All too | | | | about getting them the best deal I can for their |
| often, customers become fixated on price and | | | | situation, and I am respecting their time, and hope |
| closing costs alone, as the determining factor in | | | | they would respect mine as well. Reverse |
| making their decision. But price is just one small | | | | psychology is a powerful tool. Try it! |
| thing to consider when shopping for a mortgage. | | | | 6. Ask questions, and keep asking questions until |
| Here are some of the best responses/methods | | | | you can get the customer to open up. I create |
| I've used to overcome the "price" hurdle. | | | | trust with the customer because I ask so many |
| 1. The first time you hear a price objection from | | | | upfront questions before just providing a rate and |
| a customer, ask them which will cost them | | | | a "price". I want to learn as much as I can about |
| more...paying too much in closing costs or paying | | | | their situation, so I can help them get the best |
| too much in interest over the life of the loan? | | | | deal we can find. I ask questions that other loan |
| Then show them the raw numbers. They will | | | | officers don't bother with, or aren't even aware |
| almost always choose to pay the closing costs | | | | of. What happens is that over the course of the |
| themselves. A higher interest rate will cost them | | | | conversation, the tone "flips" and instead of me |
| ten-fold or more. | | | | selling me, they are selling themselves on going |
| 2. When you have an objection to price, what | | | | with me. The most common response I get is, |
| you want to do is re-focus the customer on the | | | | "Well no one else asked me all these questions |
| value of what you're offering. What is the net end | | | | that you are". My response, "Well mr. customer, |
| result they will receive once the loan goes | | | | how do you know you are getting the lowest |
| through? Is it a lower monthly payment? Is it a | | | | rate possible?" Again, dead silence. This gets them |
| cut in interest rate? Is it a cash-out? Whatever | | | | to think. (By the way, you can see some of the |
| their motivation, be sure to re-emphasize their | | | | actual detailed questions I ask at The more you |
| own personal goals to them. And do it over and | | | | can get the customer to talk, the less you have |
| over again. Some customers get so scared with | | | | to "sell". |
| big numbers, they can't see the forest through | | | | 7. Explain to the customer that in most cases, |
| the trees. Does this deal meet your needs? Will it | | | | depending on the loan, you can always refinance |
| help you to achieve your goal? You have to be | | | | change to another loan later once the customer is |
| alert and listen for clues into their motivation. | | | | settled. Sometimes, loans present a tough |
| 3. Explain to the customer what a "no closing | | | | scenario. Someone with bad credit can't expect to |
| cost" loan truly is. No loan is done for free, and | | | | get the lowest rate out there. Those low rates |
| outside third parties always have to be paid | | | | aren't for them, but THEY THINK THEY ARE! Bad |
| regardless of who does the loan. What I tell the | | | | credit people need to be educated on the |
| customer is either you pay for these things | | | | process. And the more you can explain and guide |
| upfront, and get a lower interest rate, or the | | | | them through things, the more likely they are to |
| bank will pay for these things, and raise the | | | | trust you. I always try to focus the customer on |
| offered rate slightly. This means no out-of-pocket | | | | the end result. Remind them that a small sacrifice |
| cost for the customer, but over the life of their | | | | now, will mean a brighter and better future |
| loan, they will pay many times this price in | | | | tomorrow. |
| interest! When they see the numbers in black and | | | | 8. Go through the Good Faith Estimate GFE, |
| white, they almost always elect to pay the closing | | | | line-by-line with the customer, and explain what |
| costs upfront, to get a lower rate over the long | | | | the mandatory third party fees are, as well as |
| term. It just makes common "cents". | | | | your own in-house fees. Third party fees are |
| 4. Ok. The customer is dead set against paying | | | | things such as the appraisal, title work, any state |
| any closing costs. And those Ditech commercials | | | | stamp taxes, etc. If the other guys aren't putting |
| have gotten to them! Lol. There are two ways to | | | | all the numbers out there in black and white, then |
| approach this. Ask them this, "Would you like to | | | | they aren't telling them the whole truth. You can |
| roll the closing costs into the loan amount, or | | | | even have the customer fax the other estimates |
| would you prefer to roll these costs into the | | | | over to you to have a look at. In the end, by |
| interest rate?" (Meaning that you as the broker | | | | being upfront you will win more deals. |
| will end up paying these costs out of your YSP | | | | These are some of the tactics I've used to make |
| commission). By asking these two questions, | | | | me more successful in the mortgage industry. |
| customers will invariably want to know more. | | | | What methods have you used? How do you |
| Here is your chance again to further educate | | | | make price the last issue on the customer's mind? |
| them, and set yourself apart as a "trusted | | | | Overcoming the price objection is one of the |
| advisor" and a true professional. | | | | most common tasks that you as a loan officer |
| 5. No matter what your price is, the customer will | | | | will have to master before becoming a top |
| always think they can get a better deal | | | | producer. But always remember that no matter |
| elsewhere. So tell them to go find it, then come | | | | the customer, price and value are always the |
| back to you once they are done shopping! When I | | | | bottom line. |
| say this, I usually hear silence on the other end of | | | | |