Your Guide to Growing Your Mortgage Business

Apr 4, 2024

Mortgage How To & Education

As a mortgage professional, you need to be keyed into the real estate market just as much as the agents showing your new clients their forever homes.

Because when the process of buying and selling slows – when interest rates climb, when listing prices soar, when inventory dries – all of this impacts the healthy roster of prospective customers you need to keep your doors open.

And we won’t sugarcoat it for you.

The past five years have been tough on the housing market.

This means it’s more imperative than ever that you have your own strategy to generate leads.

How do you do that?

We’re here to help.

And we’re going way past mass outreach, car banners, and voicemail marketing. We’re targeting hyperlocal segments of clients just right for you and your business – and we’re going to show you exactly how to connect with them.

We want you to succeed. So, let’s review the information you need to get there.

In this complete guide, we'll cover:

What Is A Mortgage?
Different Types Of Mortgages
Mortgage Rates

Mortgage Leads (Lists You’ll Love)

Actioning On Your Mortgage Leads
Using Public Records Data To Build Your Next Lead Lists

Before we dive into the strategies you’ll need to establish your own lead generation machine, let’s review the basics of your business.

What Is A Mortgage?

A mortgage is a loan used to finance the purchase of a home. This loan allows a new homeowner to pay that hefty price tag off over time (usually 15 or 30 years).

A mortgage is made up of multiple parts – all of which come together for that monthly payment your homeowner will be making to compensate their lender or bank for their initial cash upfront. For review, let’s break down each of these parts.

know-property-better (1)

Collateral: When a mortgage is finalized, the newly purchased home serves as collateral for this agreement. This means if the homeowner fails to make their mortgage payments, the home could be repossessed by the bank.
Principal: The core dollar amount the bank allows a homeowner to borrow. This is before added interest. If homeowners wish to lower the principal owed each month, increasing their down payment would help them do this.
Interest: As with many large purchases from student loans to credit cards, mortgages come with interest on top of the principal payment, lumped into the mortgage sum every month. Essentially, this is a percentage charge for allowing a homeowner to borrow a certain amount.
Taxes: A homeowner pays property taxes on their home purchase, which aims to give back to their neighborhood, city, and state (think roads, schools, public transit, etc.)
Insurance: Just like you’re required to insure your car before driving it off the lot, mortgage lenders require home insurance on purchased residences. This protects both the homeowner and the lender in cases of fire, disaster, etc.
(As Needed) PMI: Private mortgage insurance will likely be added to a traditional mortgage loan if the homeowner is unable to put 20% down. Because homeowners who are unable to meet that cash-upfront threshold may signify higher risk, PMI works to alleviate that risk and protect lenders should the home face foreclosure.

Different Types of Mortgages

We know homeowners have options when considering what mortgage is right for them. Let’s recap a few of the most popular:

Conventional Mortgages: The most common mortgage type available (accounting for 82% of first-time homeowners), conventional mortgages are a great fit for salaried buyers who are entering the purchase with good credit and savings. Typically, this requires a 3-20% down payment.
FHA: A good option for potential buyers with lower credit, FHA loans can also apply to those who are unable to meet a 20% down payment. About 10% of first-time homeowners opt for this.
VA: Applicable to active duty or past U.S. military members, VA loans are backed by the Department of Veterans Affairs (vs a more traditional lender). Potential buyers do not need a down payment or mortgage insurance.

While not utilized as often, let’s not forget USDA mortgages.

USDA: Backed by the Department of Agriculture, USDA loans are intended for rural parts of the country (typically meaning fewer than 20,000 community residents and not related to a major city or metropolitan area). For those who qualify, USDA loans offer lower mortgage rates and no down payments.

Want more details? Read our full breakdown of mortgage types and how to find the right fit for your clients.

Mortgage Rates

Along with the differing types of mortgages comes the reminder that there are fixed-rate mortgages and adjustable-rate mortgages.

know-your-competition (5) Fixed-rate mortgages have interest rates that are fixed and unmoving. This prevents interest payments from rising throughout the duration the loan is being paid off.

Adjustable-rate mortgages feature interest rates that can move (whether year over year or after a certain period of being initially fixed). This can impact the total cost of monthly payments.

Mortgage rates are tied to the price of mortgage-backed bonds. As Wall Street sees fluctuations, so can the rates offered to prospective homebuyers. When inflation is low and there is more stability – typically, rates will be lower. When inflation is high, or there is instability within the market – you can count on those rates to climb.

Post-COVID years have seen some of the highest mortgage rates in decades.

Mortgage Leads

Now we’re at the important part. As you consider how to grow your mortgage business, you may wonder how to reach more customers, especially if said customers may not be in the market to buy right now.

The answer? Proactivity.

Finding and reaching out to prospective clients before they’re even looking is often a key strategy for growing your roster. Why? It inserts you into the process early, allowing you to be the first to make contact so when these buyers are ready, you’re the first they call.

Another perk? Even for homeowners who don’t intend to move, proactivity can win you clients. Starting a conversation with a potential customer around their existing mortgage and the potential of refinancing can pay off. You just need to know who to reach out to…and how to find them.

lookup-property-or-owner (2) Let’s chat through a few different segments of potential customers and why they should be the next on your contact list.

PMI Elimination

A homeowner can request to cancel their PMI once they hit the threshold of 20% equity in their property. Until then? Homeowners may be burdened with extra monthly payments.

Alternately, when a homeowner’s loan-to-value ratio (aka LTV ratio) reaches 78%, The Homeowners Protection Act of 1998 requires PMIs to be removed.

That’s where you step in.

You can target PMI elimination prospects – homeowners whose homes have gone up in value and who may be in a position to refinance their loan (therefore eliminating their mortgage insurance).

Wondering how to find this new segment of potential customers? We’re here to help.

Target customers with a minimum LTV of 80%
Target customers with a maximum CLTV (combined loan-to-value) of 80%

Mortgage records can be found via public records in your local county office and on their related websites. Real estate software, such as MLS, can also be leveraged to look up property loans.

But be warned, if you can easily find a residence on MLS, so can each and every one of your competitors.

We highly recommend opting for a more data-driven approach, such as lead generation platforms, that allow you to layer-specific criteria over a hyperlocal search radius, permitting you to seamlessly search for any customers with, say, a minimum LTV of 80% and a maximum CLTV of 80% within a customized area.

lookup-by-location (1) This means you can build your very own lead lists with relevant homeowners in your community instead of going property by property and slowing your outreach to a crawl.

RT&T Refinance

As most mortgages carry 15 or 30-year terms, we have to assume the homeowners’ financial position, as well as stability within the economy, would change during those periods, whether with improved homeowner credit scores or with lower mortgage rates available across the country.

In these cases, homeowners may choose to take advantage of economic shifts and refinance in order to better their mortgage and lower their payments.

hyperlocal-marketing-automation (5) You can target rate & term refinance prospects– homeowners who have an existing loan at a poor rate who have built up equity in their property and may be looking for a fresh deal.

Target customers with a first loan rate of at least 5%
Target customers whose mortgages are at least a few years old
Target customers who have a minimum estimated equity of 30%

As we mentioned above, you can access mortgage records via public records at your local county office. Compare this against the current mortgage rates nationwide in order to determine who may be stuck in a high-rate mortgage and who could use a way out.

However, if you want to look for multiple prospects that may apply to your above criteria versus going house by house, we suggest leveraging data-driven lead generation platforms, such as PropertyRadar. You can find thousands of relevant leads with a few quick clicks, save your relevant lists, and suddenly have a fresh segment of individuals needing your type of financial support.

Lead Lists You’ll Love

Looking for additional relevant segments of leads that go above and beyond PMI Elimination and Rate & Term Refinance? That’s why we’re here.

lists-library (2) While there’s a plethora of economic opportunities that may cause a homeowner to consider changes to their loan, we’ve rounded up a few of our favorites.

HELOC & Cash Out Prospects: Target customers who have less than 70% CLTV
Mortgage Consolidation Prospects: Target customers who have multiple loans as well as sufficient equity to refinance
Reverse Mortgage Prospects: Target customers with sufficient equity over 62 years of age
Upcoming ARM Reset Prospects: Target customers 90 days from their next ARM reset dates
Renovation Loan Prospects: Target customers who purchased homes 5-10 years ago with sufficient equity
Private Money Loans: Target customers with private loans
Free & Clear Prospects: Target customers with 100% equity in their property

Eager for more? View all of our recommended lead lists for mortgage professionals.

And if you’re looking for additional resources to help, read our Top 27 Resources For Your Mortgage Business.

Actioning On Your Leads

Now that you’ve found your leads, let’s break down just how to reach out to them…and what your messaging should be to get through.

Messaging

In a world where the average consumer sees 10,000 ads per day, receives 100 emails per day, and spends nearly 7 hours online per day…you need to be exceptionally intentional if you want to stand out and break through the noise.

hyperlocal-marketing-old-method (1) Want to come out on top? Follow our TORN hyperlocal lead generation approach.

Your messaging needs to be targeted. You need to find the right people and be precise in just who you’re reaching out to. Narrowing your search, adding specific filters to your search criteria, and ensuring all communications are personalized will be the key to your success.

You should be leveraging outbound approaches. This will ensure your messaging comes across as supportive versus spammy.

Be relevant. Successful messaging isn’t one-size-fits-all. It’s perfectly suited to your recipient. Remember, it’s about them (not you). Tailor your messaging to the unique issues they are facing. Relevancy is all about knowing your audience well and using insights where big businesses won’t.

Always be neighborly. A kind, community-centric approach is always going to score you points. Don’t align yourself with aggressive and invasive practices. Using empathy immediately makes you a team player, and that sensitivity will go far in securing you new clients.

Read more about how our TORN approach equates to an innovative hyperlocal lead generation strategy sure to scale your business.

Custom Audience

A custom audience is a group of individuals who know about you or who have engaged with your business.

As you can imagine, it’s a powerful advertising technique, as you can choose to spend ad dollars against custom audiences, knowing your recipients may have a higher likelihood of engaging (or re-engaging with you) given that they are already aware of who you are and what you can offer.

list-filters (3) Did you know that 40% of consumers prefer targeted ads (over those that are irrelevant or more general), and targeted advertising in general can increase click-through rates by up to 670%?

So…how do you go about making a custom audience? Easy. You’ve got options.

From Meta (Facebook and Instagram) to Gen Z favorite, TikTok, you can opt for one or more platforms to find your custom audience and ensure they get your personalized messaging.

Want step-by-step instructions on leveraging a custom audience for your online marketing? Read our Online Marketing 101 Guide.

Targeted Outbound

Outside of custom audiences, there are other outreach methods at your disposal to successfully connect with prospective customers.

skip-tracing-hero (2) By Phone: Did you know 69% of prospects accept cold calls and emails? And that 49% actually prefer cold calling as a first point of contact? Read more with our pro guide to phone and text message marketing.

By Email: With an average open rate of 46-50%, email marketing shouldn’t be ignored. 71% of buyers are open to emails when researching new solutions, after all. Looking for templates to make your email marketing a breeze? Read more on our 7 real estate marketing email templates you can create.

By Direct Mail: Think traditional post is old fashioned? Think again. 80-90% of direct mail is routinely opened, with 42% of recipients actively engaging with their direct mail. Read more about our tips and tricks for direct mail marketing and how you can use it to scale this year.

PropertyRadar + The Power of Public Records

You want to find your next leads? You need hyperlocal lead generation.

Hyperlocal lead generation is all about breaking the mold and standing out – doing things differently. Heck, it’s playing an entirely different game! You’re stepping away from intrusive, aggressive practices and reaching out to hyper-targeted segments of consumers you know you can help.

And the first step in the hyperlocal lead generation approach is finding the right people.

We've mentioned the power of public records before, the hotspot of information on the potential clients you need. The problem? Unless you have hours to kill and want to browse single property by single property – this method isn’t the most efficient.

That’s where we come in.

PropertyRadar taps into the expansive power of public records, boasting over 150 million properties, 250 million people, and over 1 billion phone numbers and emails in a robust database, intricate and innovative – and yet accessible enough to access via desktop and mobile applications.

PropertyRadar also delivers the most extensive filtering criteria of its kind, allowing each user to layer complex search possibilities, targeting filters, and specific parameters in order to reach the exact people and properties they need.

With this magnitude of targeting power, it’s no wonder why PropertyRadar is the world’s most powerful property and property owner platform.

data-smart-pro (2) Want to learn more? Read on for the 10 Reasons Why PropertyRadar Needs To Be Your Next Real Estate Lead Gen Tool.