Mortgage Loans Guide

Here are some simple preparations steps that will make the process of obtaining your home mortgage loan go more smoothly and with less chance of missing out on the loan because of missing information.

In order for a home mortgage loan to go smoothly through the process of application, documentation and closing, certain tasks must be accomplished to the satisfaction of the lender. There are a number of these tasks that can and should be completed before even looking for a property that will become a dream house. If you clean up your credit report, as needed, for instance, this process can take several weeks. If you have accomplished this task before your credit is checked by the lender, it will present a much cleaner picture and you loan is more likely to be approved.

Check your credit report

Because many of the qualification points for your home mortgage loan depend upon the credit score or credit history attached to the borrower, it is important to know precisely what entries appear on each of the credit reports from the three major credit reporting agencies–credit bureaus. It has been said that as many as 80% of all credit reports contain inaccuracies at some level. Allow time to receive, review and correct such inaccuracies. It can smooth the processing time on your loan and can save you thousands of dollars over the course of the loan.

Decide how much house you can afford

Before settling on a house or applying for a home mortgage loan, you may want to become pre-qualified. This process will tell you how much you can afford according to the lender, but beyond that, you are the best person to determine how much you should be paying for the home. This will depend upon such features as your career path, where you want to live, whether or not you plan to raise a family, or alternatively how soon your family will be leaving the next. It is always better to be conservative when choosing the size of the house you purchase.

Decide on rates and terms

Before obtaining a home mortgage loan, you should prepare yourself with an understanding of typical interest rates and loan terms so that you are prepared to not only comprehend what the words mean, but realize the dollars and cents costs of your various options. For example, do you want a 15 year loan with monthly payments somewhat higher but a shorter payoff time, or would you be better served with a 30 year loan? Does a fixed rate mortgage work with your budget, or do you need the flexibility of an interest only loan for a time? Do you have the self-discipline to work with a more flexible loan schedule?

Pick a broker

Another project that you will need to complete while getting ready to apply for your home mortgage loan is selecting a loan broker. There is a wide variety in the knowledge and experience base of available loan broker. Of course, you will want select the best credentialed broker at the lowest cost for you. Checking reputation, experience and professional attitude of your short list of brokers can occupy a considerable amount of time.



By: Julian Lim

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Get hold of a home mortgage if you are a first time buyer. As with any other loan type, you will have to pay an interest. The most important factor to consider when securing a home loan is the cost of the loan.

If you want to get a good rate on your home mortgage, you will need to look into the many factors that can raise or reduce your costs. Take a look at some of these factors:

THE LOAN TYPE

There are many loan products out there that you could avail of. There is the fixed rate mortgage, the adjustable rate mortgage, the balloon mortgage, the interest-only loan, and the graduated payment mortgage loan. In each of these loan types, the main aspect that differs is the way in which you pay your interest.

So, if you are looking for a loan with a fixed monthly payment, but can put up with a higher interest rate, take up a fixed rate mortgage. If you don’t mind an interest rate that can rise in the future, though it is currently low, go in for the adjustable rate mortgage. In interest-only mortgages and balloon mortgages, you pay only the interest during the loan period.

Once the duration of the loan is over, the principal can be paid off. In a graduated payment mortgage loan you pay lesser loan installments in the initial period of the mortgage. The installments will increase as the term carries on.

MAKING PAYMENTS BASED ON THE LOAN TYPE AND YOUR INCOME

Once you have decided on the type of mortgage you want, estimate the expenses that you would incur very month. The monthly mortgage payments will depend on the type of loan that you take. So take one based on how you would prefer to make repayments. You should take into account your income level and other expenses and see which kind of mortgage would suit you best.

COMPARE RATES

Thereafter you will have to look out for the rates that are being offered. Read reviews before you pick a lender. Look up websites and online lenders and see what you can find.

OTHER FACTORS

The loan amount that you take and the loan period will also determine your mortgage expenses. The shorter the loan period, the lesser you will be paying in interest and the quicker you will pay off the loan.

You will have to think about other factors like the amount of down payment as well. If you want a low down payment, you would have to ask the lender and find out if they have programs in place for such specifications. Closing cost is yet another factor that you need to consider when taking to your mortgage lender. Are their closing costs too much for you? Is there any loan program with reduced closing costs available?

SUMMARY

Make sure you do a lot of negotiating with your lender. This is essential if you want to end up with a good mortgage loan. The loan type, loan amount, closing costs, and so on will decide the cost of your home mortgage. These should come within your income level. Explain your financial situation to the lender to find out which loan product will suit you.



By: Ajeet Khurana

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Whether purchasing your new home or refinancing for lower rate/term or cash out, trying to do the leg work yourself can not only be a daunting task, it can actually cost you more money in the long run.

While mortgage brokers are often thought of as a “Middle Man” in the loan process, a good loan officer who works for your best interest is invaluable in narrowing the search for the best suited loan package to meet your goals. Most brokers have access to many lenders and the larger companies can actually procure better rates than you could by going directly to the same lender! How? Larger broker houses do such large volume with their most used lenders that lenders allow lower rate programs than are offered to the general public.

Be caucious of this, though. Brokers who use only a narrow list of lenders may be limited in what they can offer you. “Shopping” brokers costs nothing except a credit pull, which can be detrimental to your score by shaving points off if done too often in a short time.

When searching for a good mortgage broker, try to get a feel for the services they offer. Ask questions about thier loan process, turn around time and special services they may offer, like in home closings, overall financial analysis, etc.

Once you find a broker you feel comfortable with, be open about what your specefic priorities are so they can best suit the program to your needs. For instance: if you are refinancing a house that you plan to move out of within 3 years, why pay higher rates of a fixed loan when a 3 year ajustable rate mortgage would suit your needs at a lower rate? On the other hand, if you plan to stay in your home forever, fixed rates at a time when rates are low, like we experienced this last year, are ideal IF your cerdit, debt to income and liabilities afford a low rate. There are many variables to hoaning in on the right loan for you, depending on your specific goals and qualifications. This is the main job of the mortgage broker is to find the best suited program for you with a long term goal in mind.

Copyrights - GetLoansCheap.com 2006

Tamara D Schmitt

Tamara is currently a loan officer with First United Mortgage out of Greenville, SC and has been in the Mortgage field not far from 2 year now. In the time that Tamara has been serving her clients she has learned alot about how to better people through helping them achieve the best mortgage for her clients. She is currently the Top Rated Loan officer for GetLoansCheap.com - A Site totally dedicated to helping people know what Mortgage Professionals are best to deal with and which are best to stay away from, among many other features the site has to offer.

She can be found at Get Loans Cheap - by going to Mortgages or just going to her home page of Tamara and seeing more info or contacting her directly there.



By: Get Loans Cheap

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What is hard money and how does it work?

I’m also known as the Pitbull which is a name I was given many years ago by my friends and competitors due to my tenacious business approach. Somehow the name stuck throughout the years and I accepted it as part of my persona. My business career has spanned over 30 years. In the 80’s I was an anchor on the Financial News Network. Perhaps you remember me from my nightly reports. After the network was sold to CNBC I was offered to host The Leonard Rosen Show, which was nationally syndicated. In the 90’s I became the CEO of a large medical group. We specialized in the treatment of chronic obesity. Our focus was to provide medical services to our patients and provide a hard money loan to finance their treatment. This was a huge success, and is what opened my eyes to the hard money business.

We train loan officers, mortgage professionals, Real Estate Investors and hard money lenders how to succeed in the hard money business. If you are interested in a career in mortgage lending, our hard money school is a must for every mortgage broker and industry professional. Pitbull mortgage school is much more than a loan officer school providing loan officer training. In order to compete in the competitive environment of mortgage brokering, you need to learn all the aspects of hard money lending. Pitbull mortgage school is the definitive answer to a high income career in mortgage banking. Our California based hard money seminar series has trained mortgage professionals, loan officers, and attorneys in the lucrative field of private financing.

I host the most powerful and dynamic seminar on hard money lending that has ever been taught.

I teach the secrets and techniques of the hard money mortgage business to brokers all over the country. My students learn more in the first 45 minutes than most brokers have learned after 20 years in the business. The tuition of my seminars ranges from $395 to $695 depending on the venue. If you can’t get away, you may be interested in purchasing my DVD which was filmed at our seminar at the Monte Carlo Hotel & Casino in Las Vegas on February 7th 2007. This seminar was a tremendous success and sold out with standing room only!

I hold nothing back, Everything is disclosed!

You will receive the actual names, phone numbers, and contacts of my preferred hard money lenders.

This seminar is a must for any loan professional who desires to earn $500,000 or more in the hard money business. I know no other industry that affords more potential to earn in excess of $500,000 per year.

My experience tells me that most loan officers and mortgage professionals never even come close to reaching their potential in the hard money business. The reasons are simple- they spend most of their time spinning their wheels instead of converting their time into what I call revenue producing efforts. You need to know what to ask the borrower to flush out the real information. Then you need to learn how to manage and control your borrower through the process. And most importantly, you need to know where to place the loan for funding. Most brokers never get their loans funded. No funding, no commission. This seminar will teach you the specifics of how to get your hard money loans funded.

The Pitbull Mortgage School teaches you specifics not hypotheticals.

Here is a sample of what you will learn:

- How to do mezzanine and conduit loans.

- How to start a hard money mortgage company.

- How to ask the right questions of the borrower

- How to manage your borrower

- Where to place your loan scenario

- How to determine the real value of the property (the Pitbull Hard Money way)

- How to package and sell your loan to the investor

- How to do raw land deals, commercial projects, foreclosures, NOD’s and real estate development projects

- How to assess an appraisal that will lead to funding the loan

- How to earn 4 to 5 points on a first trust deed

- How to do second mortgages and make money doing them



By: Leonard Rosen

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Although there are a few options for veterans qualifying for VA home loan programs, VA mortgage loans for home purchases are probably the most well-known and most commonly utilized, and for good reason. Eligible veterans VA mortgage loans are a benefit of service designed to make home buying easier and more affordable for them.

What Are VA Mortgage Loans?

VA mortgage loans are more accurately described as VA insured mortgage loans because in actuality that is what they are. The federal government and/or the Veteran’s Administration does not make direct loans to veterans; instead, the federal government provides insurance for VA mortgage loans that decrease the risk of the loan, thus allowing lenders to offer better terms. They also grant VA mortgage loans to qualified veteran borrowers without requiring a down payment or requiring Private Mortgage Insurance to be paid on the loan.

The first thing to understand as a veteran interested in exercising your benefits is that your loan is still funded by a private bank or mortgage company, just as it would be if you were to take a traditional home loan; in this way the basic mortgage product is not very different. The difference is that the government guarantees payment on your loan should you default, and so lenders will be more willing to give you better rates and terms than you would qualify for on your own as a private citizen.

Why is it important to know this? Because it is important to know that as a veteran with this eligibility you should not settle for a lesser home loan. But even more importantly it is important to know this because it is important to know that the government only insures your loan, it does not dictate your terms. Different VA mortgage lenders will still offer different terms and interest rates, just like if you were shopping for a traditional home loan.

Practically speaking, this means that the first loan you are approved for may or may not be your best deal and you should seek the best VA mortgage loan terms you can. It also means that no matter where you live in the U.S. there are good and better VA mortgage lenders, so you should shop for one with that has your best interests in mind. However, know that that lender does not necessarily have to reside in your state—you might look for an Alaska VA mortgage lender online and find that the best professional will work from Colorado. The key to success is to work with an experienced lender that offers good terms and excellent customer service.

What VA Mortgage Loan Services Do Lenders Offer?

The other piece in understanding VA mortgage loans is knowing that there are a number of options available to you. The job of the VA lender is to work with you to explore those options and to walk you through the process seamlessly. Again, this does not necessarily mean the best professional will be local to you. For example, that Colorado or Alaska VA mortgage lender could be just as qualified (or more qualified) to walk you through the Pennsylvania VA home loan process. The process is based on federal regulations, so the same basic rules that apply for an Alaska VA mortgage lender will apply for the one managing the Pennsylvania VA home loan process, and so on.

Regardless of where you live and what your mortgage shopping needs are, if you are an eligible veteran, or think you might be, you should look into VA mortgages before making any final decisions. You might just find that VA insured mortgage loans offer just what you are looking for, including a VA home loan refinance. The tools and resources of VA mortgage lenders can help you determine whether a VA mortgage or VA home loan refinance might be best, and you can use their tools (like the VA mortgage calculators) to help you compare and contrast programs and terms.

There really is a lot to know about VA mortgage loans, but you do not have to try to navigate the waters alone. There are excellent VA mortgage experts and specialists that can clarify all your options and possibilities, and help you evaluate the benefits of VA mortgage loans so that you can be assured you are entering into the best home mortgage program with the most affordability for you.



By: AccessNational

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In the past, borrowing money if you had a poor credit record was next to impossible. Under such circumstances, the only avenue open to borrowers were the dark and sinister avenues of loan sharks. Taking money from a loan shark was not only risky, but one also had to pay very high interest rates. Thankfully times have changed and these days it is relatively easier to get a loan in spite of a poor credit record. In fact these types of bad credit home loans taken under poor or sick credit circumstances can be known as bad credit home mortgage loans.

With plenty of private financial institutions and banks agreeing to poor credit mortgages, things have really improved for those who want home loan mortgage services. In fact even reputed lenders are willing to offer home loan to borrowers with - poor credit history, even a past bankruptcy statement, CCJs or just not so good records. The best part about this change is that the lenders have changed the trend of sub-prime mortgage rates to a thing of the past.

The trend though has nothing to do with lenders suddenly becoming generous, but everything to do with lucrative and ever growing market for lenders. It has been noticed that bad debt figures are on the rise, this established, a money lender can; charge more than the usual rates for non-conforming borrowers. Actually it is a win-win situation for all concerned.

However, the granting of such poor credit home loan mortgage has given rise to issues concerning irresponsible lending. This has raised a question mark on the authenticity of lenders imparting financial advice to borrowers. As such, the Financial Services Authority (FSA) has voiced its concern at the mushrooming of such independent lenders.

The number of people with bad credit is ever growing, as a result mortgage loan for people with poor credit are a preferred option for owning a home of your own. Apart from the deficiencies in the system, this provides those with a poor credit record to better their credit history and grants them a poor credit home loan without much fuss. Thanks to the system of such mortgage loan for poor credit even those who do not have the best of credit records can buy a house with such home loan.

The policies for poor credit home mortgages loans in United Kingdom have been designed for those with poor credit record. So whether you have missed out on payments, face bankruptcy charges or have defaults and arrears you could still be eligible for such a poor credit home loan UK.

The reasons behind the emergence of poor credit mortgage loans can be summed up thus:



Large number of people with a poor credit.

The changing attitude of lenders towards financing sick credit.

The competitive mortgage loan market & the presence of many lenders.



In case you are financing such home loan mortgages, you can also be secure because here the new house in question acts as the collateral for availing the loan. Thus in case the lender does not get his money on time, he can foreclosure the new property and square of his money. This is in fact one of the primary reasons for easy poor credit homeowner loan accessibility. Refinancing mortgage can help one a lot in such situation as well. Refinancing mortgage can provide a recovery opportunity for people with poor credit. However refinancing mortgage itself sometimes become a bad impression upon one’s credit record.

You would be well advised though to go through the terms and conditions of the bad credit home mortgage loans very carefully. Give special attention to the rate of interest being levied on the mortgage as well as the terms in fine print.



By: Allan Smith

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If you are consulting lenders for loans, first question would arise regarding your credit status, but not in case of a bad credit loan. Lenders providing such loans offer loans what borrowers help mending deformed credit score.

If you are consulting lenders for loans, first question would arise regarding your credit status, but not in case of a bad credit loan. Lenders providing such loans easily accept your recent credit status and will not hesitate offering you loans. Bad credit personal loans cater to the needs of taking personal loans as well as help in healing blemished credit rating. So that means, even if with a poor credit status, your requests for personal loans can be approved. Dual benefits of these loans include helping borrowers to handle their financial crisis and giving chances to recreate a good credit status once again.

How to Strengthen Deformed Credit Status with a Loan?

With wide range of personal loans made available for bad credit scorers by several lenders, you can easily find an appropriate bad credit loan for you. Not just personal loan, you can also manage a bad credit refinance loan, bad credit mortgage or a bad credit auto loan that may complements your requirement. You may also possibly secure a lower interest rate with the loan for bad credit you are taking. Interest rates of loans for people with bad credit depend on various aspects attached to the loans offered.

Determining Interest Rates of Bad Credit Loan

The interest rates can be higher or lower for a bad credit loan depending on borrower’s credit rating, involvement of collaterals, income structure of borrowers’, involvement of additional securities like down payment in the scenario and the loan amounts taken. Obviously, lenders can easily provide personal loans for bad credit if the loans are somehow secured. If borrowers use their collaterals like home or ready for down payments, lenders know that the loan payments will not likely to be defaulted.

How Collaterals Can Reduce Interest Rates of Bad Credit Loans

A bad credit loan secured with collaterals like home or property is usually available at reduced rates. These loans are charged with much lower interest rates than unsecured personal loans. Usually, the interest rates of secured bad credit loans can be higher than standard mortgage loans offered. However, if the value of the property used as pledge for loans is higher than the loan amount offered, interest rates of the bad credit loans will be lowered. Repayment term of a bad credit loan vary depending on purpose of the loans taken, however the term ranges from 6 to 8 years.



By: James Arther

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With the real estate market in a real funk, there have been many short term solutions attempted by lenders to gain more business. In short, banks are tightening up their standards and are having trouble finding lenders to take on the high payments associated with top notch interest rates. What has their solution of choice been? They want to entice people to get a mortgage loan with a significantly lower payment. Though this might sound like a good solution on the surface, it has created problems for borrowers and the entire market. Cheap mortgage loan offers are hurting people financially for the long term and they don’t even realize it.

What are these cheap mortgage loans that have become so popular? They are presented in nice names that make people believe that they are getting a deal. If you ever hear any lender discussing an “interest only” loan or a loan with no down payment, then you can bet that something is up. There are a number of different names given to these mortgage loans and each one has its own ups and downs. You can bet that the ups are the aspects of the loans that are being presented to potential borrowers at the onset of the process.

The problem with these loans is that they get people no closer to owning a home as they would be if they were renting a home. Unlike with renting, they have a huge loan on their back, though. That huge loan is just sitting there and all the person is paying is the interest. It might sound good on the surface by decreasing the payment substantially, but it weakens a person’s long term financial prospectus a great deal. The only person who benefits from such a deal is the banker.

With these mortgage loans, a person can put themselves in significant danger and at great risk. What happens if you lose your job or something unexpected happens? Then, you are saddled with a loan that is too big for your bank account. In this case, foreclosure is eminent and your family will be left without a home. Beyond that, your credit will be wrecked to a point where it is nearly beyond repair. All of this is done while you aren’t even earning a bit of equity on the home.

That is another problem with cheap mortgage loans like the interest only loan. A person ends up missing out on the inherent benefits of accrued equity in the home. Since the value of your home is also certainly going to increase over time, it makes plenty of sense to put your money into it. After all, this is basically a can’t miss investment. With a bit of equity built into the home, you also have a personal insurance policy should something terrible happen. You could always borrow money against your equity to pay off a large bill or make another investment.

Other types of dangerous loans are longer term loans. These are gimmick mortgage loans which allow the home buyer to stretch his or her term over 40 or 50 years instead of the standard 30 year term. This makes the payment somewhat more affordable, but it costs a ton in interest payments. When you make a half century commitment, you are really just committing to paying a ton of interest to the bank. It makes no sense to put yourself in that situation, especially with the amount of uncertainty in today’s world. Most home buyers don’t know what they are doing tomorrow, much less 50 years down the road.

How do these things impact the market on the whole? It simply weakens the borrowing base. When that happens, just about everyone suffers. People looking to sell their homes are left out to dry because there aren’t enough worthy buyers. Home builders hurt because people can’t afford the inflated interest rates. The market will ultimately suffer when these people can no longer afford to keep up their cheap mortgage loans. When that happens, banks and lenders lose their profits, interest rates begin to rise, and the entire system collapses upon itself. Though there are checks and balances in place to avoid a complete collapse, the slight loss of market productivity has long term negative consequences.

Smart borrowers will stick to the standard mortgage loans and leave the gimmicks at home. There is nothing good about paying a ton of interest to the bank when that money could be put to a much better use. Instead of sacrificing your long term financial foundation for smaller payments, try to think about your situation with a broader scope. Securing a mortgage loan is part of securing your future. Don’t waste it by falling for cheap offers.



By: M. Hammer

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When Should You Refinance Your Mortgage? There are two primary reasons to refinance a mortgage: to get a more desirable rate and terms or to extract cash from the home’s equity. Both of these reasons can of course also be fulfilled!

Rate-and-term refinancing

Rate-and-term refinancing pays off one loan with the proceeds from the new loan, using the same property as collateral. This type of loan allows you to take advantage of lower interest rates or shorten the term of your mortgage to build equity faster. Rate-and-term refinancing refers to a myriad of strategies, including switching from an ARM to a fixed or vice versa. For example, if you have an ARM that is set to adjust upward in a few months, you can refinance into a fixed-rate mortgage. Or if you have a fixed-rate loan and you know you will move in two or three years, you could refinance into a lower-rate 3/1 hybrid ARM.

Cash-out refinancing

Cash-out refinancing leaves you with additional cash above the amount needed to pay off your existing mortgage, closing costs, points and any mortgage liens. You may use the additional cash for any purpose.

For example, say you bought your house for $150,000 a few years ago and borrowed $120,000. Now the house has an appraised value of $250,000 and you owe $110,000. With a cash-out refinance, you could get a mortgage for $150,000. You would pay off the $110,000 you owe and pocket the $40,000 difference, minus closing costs.

Ohio Mortgage Bankers Association

To learn more about Ohio Mortgage options you can check with the Ohio Mortgage Bankers Association, founded in 1961. OMBA is a statewide organization devoted exclusively to the field of residential and commercial real estate finance. OMBA’s membership comprises mortgage originators and servicers, as well as investors, and a wide variety of mortgage industry-related firms. Mortgage banking firms engage directly in originating, selling, and servicing real estate investment portfolios.

Members of OMBA include mortgage bankers, mortgage brokers, banks, mortgage insurance companies, attorneys, credit unions, saving & loans associations etcetera.

OMBA is dedicated to the maintenance of a strong housing, residential and commercial, real estate finance system. This involves support for a strong economy; a public-private partnership for the production and maintenance of single and multi family home ownership opportunities; a strong secondary mortgage credit delivery system; equitable tax laws; suitable shelter for low income families and the disadvantaged; housing opportunities for the nation’s veterans; appropriate environmental measures; and fair and equitable bankruptcy laws.

OMBA consists of 145 member companies which represent approximately 80% of the mortgage lending business in the State of Ohio.



By: Keith George

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Many analysts are predicting a very gloomy forecast for loan officers and real estate agents for 2006.

So what are you going to when interest rates rise and the real estate market falls?

If you follow my seven strategies, you will have a fantastic 2006!

1. Goals and planning. This seems obvious, but I would say that 95% of loan originators don’t have written goals and plans to attain those goals. This one step is THE most critical step in this area. How do you expect to succeed if you don’t know where to go and how you will get there?

Take a sheet of paper, and at the top of it write “In the next 12 months, I want to earn $XXX,XXX in commissions.”

Next, break down that number into months. Then you divide the desired monthly commission amount by the average you make per transaction. This will tell you how many transactions a month you need to aim for.

The next part is to list at least 10 actions that will help you reach that number, and you do this for every month. Taking this one step of goal setting and action planning will put you ahead of 95% of the other loan officers out there, so go do it.

2. Use technology effectively. The true power of technology is its ability to automate your business, thus allowing you to focus on other business building activities.

Do you know what an autoresponder is? It is a simple email program managed by a third party company like GetResponse (www.Get-Response.com) that will automatically respond with a message of your choice whenever an email is sent to it.

Here is one way you can use it to get more leads automatically. You place a classified ad in the newspaper promoting a free report called “7 Mistakes First Time Home Buyers Make When Choosing a Lender.” All you ask is that the prospect sends a blank email to freereport@abcmortgage.com.

Here is where the magic happens. When the prospect sends them email, the autoresponder automatically sends them the report. You can then set up the autoresponder to send them a series of follow up emails a day later, 5 days later, 2 weeks later, heck, even a year later.

And this is all done automatically, whether you received two responses or two thousand responses.

With an autoresponder, it will automatically contact them, and keep you fresh in their mind. With the low cost of autoresponder services, it is a true wonder to me why more loan officers don’t use them.

Along with autoresponders, there are websites, automatic greeting card mailings, 1-800 hotlines, virtual tours, business card CD-Roms, etc.

3. Maximizing the potential of your database. It is amazing to me to see how much time the average loan officer spends in getting new business, and how little attention he gives his database of past customers.

What most of them fail to realize is that their database of past customers is their goose that lays golden eggs. It has been proven over and over again that it takes more time, effort and money to get business from a new prospect than it does to get business from a previous customer.

Successful loan officers see their databases as an asset. Sure, they too are actively marketing to find new prospects, but they spend a much greater time tending to their databases then the average loan officer.

Using a quality contact management software like Act! (www.Act.com) can make caring for your database a breeze.

4. Develop two new referral sources each month. Loan officers have enjoyed the amount of refinance business in recent years. However, the steady rise in rates has shifted the focus back to finding purchase and new construction business.

All you need to do is find two quality referral sources a month. At the end of twelve months, you will have 24 referral sources, and that should provide you with a decent amount of new business leads.

The best referral sources I have found for originators are: real estate agents, builders and contractors, attorneys, financial planners, insurance agents, and human resource managers.

Each month, research and pick out 10 potential referral sources. Send each one a letter of introduction, and let them know that you will give them a call to follow up. Whatever you do, DON’T ASK FOR REFERRALS. Not yet.

Tell them you are looking for professionals to send YOUR referrals to.

If you do all of this, out of your original ten potential referral sources, you should end up with 2-4 to choose from. Repeat this process each month and you will have a steady stream of business coming from these referral sources.

5. Perform three direct mail marketing campaigns. With the advent of email and websites, fewer and fewer mortgage professionals are doing any sort of mail campaigns. I recommend doing 3 campaigns, two focused at your previous customers and one at farming for new prospects.

You should be connecting with your database throughout the year, but these two mail campaigns should be directly focused at asking for new business from them.

The previous customer campaigns usually consist of a letter thanking them for their past support and asking them to help grow my business with referrals.

Sometimes I include a survey or referral form and self-address prepaid return envelope. Usually as an incentive, I offer a gift certificate as my way of saying thank you.

The response rate is higher than normal, and results in leads and immediate business.

I referred to the third letter as “farming for new prospects.” I don’t mean a geographical farm which most salespeople direct their marketing campaigns at.

You can purchase a mailing list for any type of potential customer that you want. Let say that you want your ideal customer to be between the ages of 35-50 years old, have a household annual income above $100,000, have a loan-to-value on their current residence less than 70% and have a credit score over 675.

Did you know that there are mailing companies that can get you a list of names and addresses that fit the criteria of your ideal customer? It’s unbelievable.

This allows you to tailor your mail piece to that exact prospect. So much so that you would be able to relate to him at a deeper level them the average business letter getting to him.

6. Start or join a business network. A business network is a group of professionals in related but non-competing industries that meet regularly to exchange ideas and referrals. The most famous business network organization in the world is Business Network International (www.BNI.com).

So I recommend that you either find a local chapter of BNI in your city, or start a business network group yourself.

Most groups contain a real estate agent, an insurance agent, a loan officer, a financial planner, an attorney, a home inspector, an appraiser, etc.

This group is a perfect environment to share ideas and leads because of the crossover of needs and services.

For example, a couple comes in to talk to their financial planner. Their youngest child just moved out of the home, and they are looking to sell their house and move into a smaller condominium.

At the next business network meeting, the financial planner brings up his customers’ situation. This results in a lead for the real estate agent (to sell their home and help purchase the condo), the loan officer (who can help with the financial of their condo purchase), the home inspector and the appraiser.

All these leads from this one couple. Do you now see the power of being involved with business network groups?

7. Create publicity once a year. Local newspapers, radio and television stations love reporting about what I call “feel-good” news stories.

As a loan officer, you have the fortune of helping people who need it on a daily basis. And if you do happen to get some media exposure, you will get instant but temporary fame that will give you an immediate increase in business.

Finding a way to help and getting the local media to notice it and report it is challenge, but the possible upside would be remarkable. Some things you can do: help poor credit customers, volunteer at Habitat for Humanity, help those who don’t speak English, give out free pumpkins at Halloween, give out free turkeys at Thanksgiving, hold a fundraiser dinner to benefit the homeless, etc.

Before the event, be sure to tell every media outlet in your area so that they can plan to attend.

No matter what happens to the market, you can confidently predict your success by following the seven strategies that I have presented.

Ultimately, you have total control over the amount of business you can generate, even if the gloom and doom industry analysts are correct with their predictions.



By: Joe Pahl

About the Author:

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