If you’re in the mortgage lending game, you’re probably actively exploring ways to get new leads. From improving your website to buying leads from third parties, the wide world of the internet has opened up new opportunities.
Just getting the leads isn’t enough, though. Once you have the lead, you need to see it convert.
If you struggle with mortgage lead conversion, you’re not alone. As an industry, mortgage lending has an abysmally low conversion rate. Here, we’ll talk about why. And in our next blog, we’ll give you some tips to change it.
Less-than-stellar close rates
Closing a lead isn’t easy, even for the most skilled salesperson. Other industries (e.g., biotech, finance, software) see a close rate of around 15–20%. Loan officers, however, often only close about 3% of their leads. In fact, a 5% close rate could put you in the upper echelon.
As a result, your company could spend a big sum on generating or buying leads — but potentially see very little in return.
So what are other industries doing that mortgage lenders aren’t? And how can you tap into that potential to see your lead conversion rate tick up? Evaluating some current shortcomings across the mortgage lending industry can help. Here are five worth avoiding.
#1: Not listening to lead preferences
Not so very long ago, phone calls were the name of the game for loan officers. But times are changing. In 2023, your leads might prefer to email or text.
The same goes for the ideal time to get in touch. Some people aren’t available while they’re at work, while others prefer to handle logistics like the loan application process when they’re already at their desks.
There’s no reason to fly blindly here. When you’re building lead intake forms for your website, consider adding a field asking for their preferred mode of contact. Or, if your lead comes to you in a way that doesn’t allow you to ask that question upfront, suggest your sales team inquires. Meeting your leads where they want when they want can help you boost mortgage lead conversions.
#2: Not leveraging technology
Yes, applying for a mortgage means making one of the biggest financial decisions of a person’s life. You definitely want your sales team to be directly involved to answer questions, offer guidance, and otherwise support leads when they need it.
While there’s no denying the importance of personal touch, that doesn’t mean you should ignore technology. Turn to tools to help your sales team thrive while simultaneously lightening their load. With options like drip email campaigns or push reminders for your salespeople, you can help them succeed.
In our digital age, automation can help you do more without piling excess tasks onto your team.
#3: Not acting fast
Whether someone filled out a contact form on your website or clicked your name on a site like NerdWallet or Bankrate, it means they’re thinking about getting a mortgage now. And that means now is the time to act.
While this doesn’t specifically apply to lending institutions, an audit published in the Harvard Business Review found that, on average, it took companies 42 hours to respond to leads. Roughly two business days might not seem like a particularly long time, but in the eyes of your lead, it could be.
That same Harvard Business Review audit found that when companies responded to a lead within an hour of receiving it, they were 60 times more likely to qualify the lead than companies that waited 24 hours.
Time is of the essence. Even if you have a small team, make it a priority to be as responsive as possible. If you don’t get in touch with leads quickly after they come in, you give them time to cool. And that added time can directly decrease your mortgage lead conversion rate.
#4: Not vetting your lead source
We’ve said it once and we’ll say it again: not all lead sources are created equal. If your mortgage lead conversion rate is particularly low, take a close look at how those leads are coming in.
If, for example, you’re getting them from your website, evaluate the information on your site. You could have an old page showing outdated rates. Leads might contact you hoping to get a rate lower than one you can offer today, making them virtually impossible to close.
Or if you’re getting a lead from your landing page, evaluate the lead’s workflow. Are you failing to ask about their budget or their buying timeline? Omitting key details like these could mean setting up your sales team with leads that aren’t serious about the homebuying process.
If you’re buying leads, monitor your spend and the results carefully. Not all lead providers offer the same type or quality of leads. Options like LendingTree, for example, might mean spending less per lead, but it also means leads aren’t exclusive to you. You’ll get the lead, sure, but you’ll be trying to beat out everyone else who also received it. Unsurprisingly, this can hurt your mortgage lead conversion rate.
If you plan to buy leads and you want help evaluating some of your choices here, we have a guide to get you started.
#5: Not knowing your competition
In our next blog, we’re going to talk about some things you can do internally to help boost your conversion rate. But don’t turn your focus solely inward. You should also be keeping a close eye on your competition.
Remember, that extends well past the other local lenders in your area. You’re also competing against nationwide lenders that primarily function online like Rocket Mortgage and LoanDepot. In other words, you can’t be slow to respond or hesitant to leverage tech tools just because the shop up the street is. Today’s homebuyer has countless options. To beat out the competition, you need to work to stay on the leading edge.
Want to pinpoint the root cause(s) of your low mortgage lead conversion rate? Talk to our team of experts today.