Mortgage Lead

10 Tips on How to Maximize Your Investment on Internet Mortgage Leads:

Every originator needs a steady source of leads. Even though most brokers realize that referrals are the best source of new business, they also find that it is necessary to supplement their referrals by purchasing mortgage leads. The question is: “What kind of leads do I buy?”

With the growth of the Internet as an increasing source of information and commerce for many Americans, Internet mortgage leads have grown tremendously in popularity. The leads are generated by websites on which a borrower can fill out an application and then submit it, waiting to be contacted by a mortgage professional who can answer their questions and proceed to further qualify them for the loan product they are seeking. But what are the advantages of buying Internet mortgage leads?

First of all, there is very little hassle. The client is already motivated. It was his or her idea in the first place to take the time to voluntarily complete a comprehensive online application—no one called or mailed the client anything to convince him to do this. The client is also waiting for someone to call. She is ready to do business.

Second, they provide a very high return on investment. There are usually no setup fees or memberships required. Internet leads are usually a fraction of the cost of telemarketing or direct mail.

Now, let's talk about things you can do to get the most from Internet mortgage Leads.

TIP # 1: RESPOND QUICKLY.
By their very nature, Internet leads should be handled differently. Internet people are used to instant answers, so they require a prompt response time for the highest closing rates. I don’t need to remind you that there is plenty of competition for their business, so don’t let a competitor beat you to the punch. Remember that they are anxious to hear from you, so call the client as soon as you receive the lead.

TIP # 2: MAKE GOOD USE OF EMAIL COMMUNICATION.
Email communication with potential borrowers often leads to better success. These are Internet people and by using email communication, you are “speaking their language.” If the client is not at home and cannot be reached by phone when you receive the mortgage lead, send them an email. This gives you the opportunity to acknowledge immediately that you have received their information. You can introduce yourself and let them know you will be contacting them by telephone to further qualify them for the loan they are seeking. So don’t procrastinate; send them an email immediately and follow up as soon as you can. As your relationship develops with the client, keep them updated with frequent emails. This gives them the assurance that you are working on their loan and it allows them to read the information you are providing at the time most convenient for them to give it their full attention. Email is faster than snail mail and it gives the client a further impression of personal contact with you as the loan professional.

TIP # 3: CONSIDER BUYING NON-EXCLUSIVE LEADS.
I know this may sound ridiculous at first. Why would someone want to buy a NON-exclusive lead versus an exclusive lead? But it makes sense for most brokers. If someone is online and filling out an online mortgage form, they are probably filling out more than one. You are already going to be "competing" against other mortgage companies whether the lead is exclusive or not. If you have a decent product and you are a decent salesperson, you simply need to build a rapport with the potential borrower so they choose to go with you. The average borrower is going to be talking to other mortgage companies regardless if your "lead" was sold only to you or to 2 other companies. So it makes sense to save a bundle of money and buy your leads 'non-exclusive.' You may ask yourself (if you are a small shop mortgage broker), "how am I going to compete with the Wells Fargo's or the Ameriquest's?" This is when timing comes into play. You need to contact each lead immediately by phone and continue with friendly email communication. The bigger companies have bigger budgets and the LO's will most likely not cherish each and every lead like the individual broker will. Use this to your advantage, and get in there before the competition does. Once again, you know you will have competition whether the lead is exclusive or not.

TIP #4: USE MORE THAN ONE LEAD VENDOR. It is always a good idea not to "put all of your eggs in one basket". Use a few mortgage lead vendors. It is a good idea to compare and contrast different lead vendors and it’s important to keep in mind that, no matter who the vendor, by chance and luck, you will have ok batches and great batches. You should probably count on a closing ratio between 5% and 15% depending on your sales skills and the competitiveness of the products you offer. There will be good weeks and bad weeks; however, over time, the numbers will work out.
Now let’s address some of the things you should ask of a lead company when you are deciding whom to go with.

TIP # 5: ASK ABOUT THE AGE OF THE LEADS.
As we have already seen, prompt response is essential with Internet leads. There is nothing more frustrating than contacting a client only to have her tell you that she has already signed up with someone else. Since you are paying for these leads, you should make certain that they are as fresh as possible.

TIP # 6: ASK IF FILTERING IS AVAILABLE.
No one knows your business better than you. You are the expert when it comes to knowing what type of borrower you have the most success with. Therefore, filtering the leads so that you will be getting the types of clients who are most compatible with your abilities and resources just makes good sense. Some types of filters commonly available are: Geographical location (such as State, Zip Code, and Telephone Area Code). Loan Type, Loan Amount, Credit Grade, LTV, and Property Value.

TIP # 7: ASK IF THE COMPANY IS GOING TO BE ABLE TO CONSISTENTLY MEET YOUR DESIRED VOLUME.
Nothing is more destructive to your cash-flow than to have your lead source run dry for long periods. Take the time to determine the number of leads you require and the time frame in which you will need them. Then, when you are speaking with your lead company, make sure that they will be able to meet this volume. If you are a small shop with a limited budget, be sure to discuss this factor as well so that you can determine whether you will be pressured to buy more leads than you can use effectively.

TIP #8: IS THE PRICING FAIR?
Like many aspects of your business, different providers have different pricing structures. By determining exactly what your needs will be and comparing several potential providers, it will become obvious whether or not a given lead company’s pricing is fair.

TIP # 9: ARE THERE VOLUME DISCOUNTS?
Most mortgage lead companies structure their pricing by the number of leads purchased. It is important to find out the volume price breaks so that you can get the most for your lead dollar.

TIP # 10: HOW ARE THE LEADS PROCURED?
Be sure to ask for an explanation of how the leads are generated. You will want to avoid any mortgage leads that are incentive-based because they are far less pure. Incentives to the client to fill out an application may result in clients who are not motivated to do a mortgage loan, but who only filled out the application to receive the incentive. Commissions or other incentives paid to employees of lead companies may induce them to pressure the client into giving a lead. Then, when you contact the client, you will find them not to be truly motivated.

TIP # 11 : ASK WHAT JUSTIFIES THE REPLACEMENT OF A LEAD
Each mortgage lead company will have a very specific replacement policy. Don’t assume you know what that policy is without asking. Some companies only replace leads where the contact information can be shown to be false. Others have very specific things that will qualify for replacement of a given lead. Be sure you have a thorough understanding of what is and is not a lead and what you can and cannot expect to be replaced by the company.