At TruHome, we talk a lot about how credit unions can handle the volatility of the current lending market. But in many ways, we’re coming to realize that “unpredictable” and “challenging” may be better descriptors for today’s market than “volatile.” Plenty of elements at play make it difficult to know what’s going to happen next or when the tide will turn. Hence the future lending market is difficult to predict.
When we look at the data, however, we see that perceived volatility has been greater than actual volatility. While consumer behavior has made the market challenging for mortgage lenders, it hasn’t truly been inconsistent.
The national mortgage market has stayed relatively consistent (albeit low volume) since February 2022. While we know how discouraging it is to experience such a low volume of originations for such an extended period, we also know there are ways to use the current market to your advantage.
We’ve developed three key tactics credit unions can use to make the most of their marketing budget and resources during an already-challenging time.
1. Maintain consistent communication with your members
No one-time promotion will influence people to take on a mortgage if it wasn’t already on their radar, especially if the promotion seems to come out of nowhere. It takes a combination of life events and market outcomes for someone to buy a first home, move, or refinance.
This is why it is essential to maintain relationships and consistent communication with members in all market conditions, even those when the mortgage market is not in its prime. In maintaining those relationships, your credit union will be in the consideration set when the time comes that they are ready to purchase or refinance.
Rather than bombarding your members with limited-time offers during an unfavorable market, the best strategy for upholding a strong home loan lending program is to stay top-of-mind with members before they look to refinance or purchase.
Take an omnichannel approach to communication to reach different member demographics where they’re most likely to pay attention. Consider utilizing your website, online banking and mobile app, social media platforms, email, direct mail and more.
This will help you build recognition, trust, and authority with your members so that when the time comes that they are ready, they can be confident in their decision to move forward.
Another thing to keep in mind is not to discount the possibility of the “right time” being sooner than later. Almost no market is so challenging that it will hinder first-time homebuyers from purchasing when everything else in their life is aligned. Even in down markets, people will get new jobs or relocate, get married, have children, and experience other life events that prompt them to take on a mortgage.
Implementing predictive analytics tools to support your communication strategy can help you determine which members locked in low-interest rates in 2020-2021 (thus may not be looking to refinance any time soon), which members did not refinance (thus may be interested in doing so as soon as interest rates begin to fall), and lastly, which members are your most likely first-time homebuyers.
2. Create a content strategy to support your consistent communication
To maintain the consistent communication recommended above, it’s important to develop valuable, timely, and memorable messaging that your members care about. Communication without education is usually perceived as spam, even by the most loyal audiences.
Focus the bulk of your content on teaching your members something rather than overtly selling them your services. True education backed by reminders of how your credit union can support their newfound knowledge (and creating easy-to-find calls to action for when your members are ready to take the next step) is an ideal balance.
Consider focusing your content on topics that will teach your members about different aspects of the home-buying process, depending on what applies to different audience segments. Think about what your members need to know before they embark on the mortgage approval process, and build your content strategy around those topics. For example:
- Members who have yet to purchase a home may not understand what a mortgage entails. Create content to walk them through the process and things to consider.
- Break down the contents of home loan lending: what a mortgage is composed of, when it makes sense to refinance, and how mortgage applications are evaluated.
- As buyers become more educated about the mortgage lending process, expand your content into related topics, like other costs to consider and prepare for when moving into a new home.
Remember, now is the time to consider content to educate and inform to keep in the consideration set. Keep the core values of “member first” and “people helping people” consistent and sincere throughout your messaging.
3. Build relationships with local realtors
Partnering with people and businesses that can support your success without directly competing is an excellent way to expand your reach to new audiences, gain exposure to new groups of potential members, and improve the service you offer your current members.
When you partner with local realtors, you open a new opportunity to be recommended as a mortgage provider for people already beginning the homebuying process. Your partner realtors may also be open to leaving marketing materials advertising your home loan lending program at any open houses they host, which gets your services in front of even more new people, though be sure any arrangements with realtors are reviewed for compliance under REPSA. Examining your database for realtors who are existing members is a great starting point for these connections.
And when members inquire about your credit union’s mortgage lending program, referring them to a trusted realtor partner improves their experience by making it more seamless. It shows reciprocity in your relationship with the realtor.
Jump-start this process by mining your membership to look for realtors who already work with you and approaching them about forming an intentional partnership.
It’s no secret that the past 15 months have been challenging for mortgage lenders, and there’s no crystal ball to tell us when volume will begin to increase. But it’s important to keep in mind that the market is also challenging for the potential buyers among your membership.
As we all wait for rates to drop and inventory to rise, stay the course: Use the data you have to look for opportunities, keep consistent with your communication, provide valuable content to your members, and invest in new partnerships (including those with realtors and CUSOs like TruHome) to stay in front of current and potential members and set yourself up for success in the future.
For more insight on protecting the health of your mortgage lending program in a down market and how partnering with a mortgage CUSO can further support your program, contact the TruHome experts today.