How Loan Limits Are Set
We saw the conforming loan limit rise for the first time in almost a decade, but do you know how limits are set each year? It used to be that Fannie came up with the conforming loan limit which Freddie quickly matched. Today, that falls into the hands of the Federal Housing Finance Agency, or FHFA. FHFA complies the average home price int he third quarter of each year and compare ot to the date one year earlier.
The Housing and Economic Recovery Act of 2008 establishes the baseline loan amount from this information. Because national housing values fell, there were no increases from 2008 until 2015. HERA prevents the conforming loan limits to fall from year to year if home values decrease. That's why we saw the limit stay at 4417,000 for so long. Last fall the Housing Price Index increased 1.7 percent from the previous year. Loan limits were then adjusted by that same percentage.
Interest Rate Quotes
And speaking of how loan limits are set, are you updating your website each day with mortgage rates? Is that really a good thing to do? Let's look at a few points we think you should consider. First, with all the LLPAs involved, you'll have to qualify the rates you're quoting. And consumers don't always read the text but instead look at the interest rate and APR. If you're quoting your best rates, and why shouldn't you, you might be quoting a 20% down 15 year fixed with a 750 credit score while theyr'e looking for a 30 year loan and they'r a breath above 620.
Second, rates are entirely too dynamic to be accurate. While rates might be in some state of stagnation with no movement one way or the other, there can be something completely out of the blue that shocks the system. Think economic or geopolitical events. When something happens do you immediately update your rates or wait for the phone calls wanting to know why the rate you quoted last week was lower than what you're quoting now.
Finally, most consumers don't realize you can't lock a rate without an official loan application on file. Whatever rate is posted on your site it needs to be exactly what you're quoting over the phone or via email. Anything higher and you could be labeled the "bait and switch" loan officer.
Wanna Be Famous?
If you have always wanted to have your name on the front of a book for sale at Barnes & Noble and other bookstores, it’s not impossible but it’s becoming more difficult. In the past a publisher would identify an industry to exploit and find an author to write a book fulfilling that niche. Where does a publisher go to find an author experienced in the niche industry the publisher wants a book? The publisher will search for authors with industry experience. These authors primarily write for trade publications. This is how I came to write 11 books about consumer finance and mortgage lending over the past 15 years. I had been writing for a real estate agent online resource with a section devoted to lending.
Over the course of nearly seven or eight years I wrote and submitted literally hundreds of articles about the lending process. A publisher out of New York City did a search for an author with my experience and they found me. Yet prior to that I was only invited to contribute to this popular real estate site because I had a working relationship with another writer who is considered by many to have been the premier author and columnist in the mortgage industry. Prior to that that same individual invited me to write regular posts in the Consumer Finance section for America Online. Prior to that I submitted posts on my own in AOLs real estate section. Prior to that I was a Contributing Editor for the trade publication Mortgage Originator Magazine. I did all of this for free. I did not charge for any article. And I did this while working as a producing loan officer.
You can see the trend. You start small and work your way up. You won’t get paid directly but you will get paid with referrals. Start locally. Contribute to a local real estate association’s website if there is a post for third party providers. You’ll need some patience but soon you’ll become the local authority. But you need to contribute not on just your own site but someone else’s such as a trade association, financial planner or accountant’s website. The problem today is it’s easy to write an article. The advent of content marketing demands you or someone on your team write and publish online. But in addition to keeping up with content marketing, find a site that will allow you to post and get noticed.
Can You Proofread Your Own Work?
There’s a reason there are proofreaders. If you write your own web content for your mortgage company you more than likely spent quite some time on a particular blog, edited it with a software program and proofread your material. You know how mistakes show up on websites and how a misspelled word, a missing word or a grammatical error and literally tarnish your reputation as a resource. Yet even the most thorough proofreaders make mistakes. You can see that almost every day in your daily newspaper. What reading an article and you see a mistake, you say to yourself, “How did they let this get by?” as you provide your best eye roll.
The fact is, it’s difficult sometimes to proofread your own work. Your eye sees what you think you wrote down but after submission you get an email or a text telling you there’s a mistake. The error is pointed out, you now see it and wonder how it got past. Here are a few pointers to catch those hidden mistakes.
Read the copy out loud. After you’ve finished, read the copy out loud. Hearing your writing is processed differently than a silent reading.
Avoid distractions. Proofread in a quiet environment with no distractions. It just takes a moment for a sudden sound to unfocus your brain.
Learn from your mistakes. Do you rely too much on proofreading software? Do you type “to” when you meant to type “too?” Spellcheckers won’t catch this mistake. Be aware of a consistent mistake.
Don’t proofread until you’re completely finished. Your Word program will automatically highlight errors that need attention and you can have them autocorrected but wait until you’re done with the project before proofreading.
Upgrade your software. Most spellcheckers and grammar checkers have a free and an upgrade. Get the upgrade.
If you concentrate on just these five tips you’ll cut down on the number of published mistakes. Other than that, you really should hire a proofreader or at minimum hve a friend or coworker put a fresh set of eyeballs on it for you.
The Impact of a Physical Book
We’ve talked here before about the impact a physical book has with your marketing. Not talking about an e-book or a .pdf upload on Amazon or Createspace, but a printed, bound book. If it sounds a bit daunting, it’s like any other large project, you just take it one step at a time. We also outlined a general step-by-step guide here on this site. Depending on how many books you print, you can expect to pay around $4.00 to $5.00 per copy. If you order 100 books, that’s $500.00. What other type of marketing can you get with $500.00? Entertainment expenses? How many clients did you take out to lunch this month? How much was your last Realtor presentation? Lunches and entertainment are certainly a critical piece of your marketing efforts few will have as much impact as your own book.
Having your own book will also help get you more speaking opportunities. When you make your next presentation you can pass out a book to each attendee. That book will be a reminder of you and your authority from that point forward.
What type of book should you write? You can always write a general mortgage book covering qualifying, etc., but you’ll get more mileage out of a book that drills down just a bit further. For example, if you live in an area where VA loans are popular or you live in a city with a military facility nearby, write a book about VA loans. If you live in a more rural, less populated area think about a book explaining the USDA program. Or, why not specialize in a book about all three government-backed loans? There’s plenty of material out there and of course if you don’t want to spend the time writing your own tome, we can do it for you. But if you’ve thought about it but never followed through, it’s time to explore the idea a bit further. It will open up so many more opportunities.
Finding the Right Writer
It’s pretty easy to find talent these days. All one needs to do is perform a quick search for a writer and you’ll come up with more than enough choices. Writing content for a mortgage website, however, is a bit more complicated. Well, not complicated but you need to be more careful about who you select. With mortgages, the writer needs to know the industry inside and out and be able to explain the sometimes convoluted process of a mortgage approval in layman’s terms.
Your writer needs to be experienced, with the ability to convey thought. Your writer needs to be an editor as well, knowing what to write and how. Proper grammar is required. Surely you’ve been to some sites online and the text was so poorly written you wondered why they even bothered with the post. You can also tell when English isn’t exactly the writer’s primary language. Something like, “You go to mortgage and buy house, get good deal.”
Yet when writing for the mortgage industry and keeping up with the latest guidelines and loan programs, it gets technical. Technical to the point where the average writer doesn’t understand the importance of a new guideline or an adjustment to qualifying credit scores. You certainly want to provide regular copy but it has to be correct. You don’t want to give your clients wrong information and you can easily do that if you work with a writer outside the industry.
And what should you pay a writer? That depends upon your budget. If a writer is too expensive for your budget, compare that price with other things you pay for. Do you take someone to lunch? Did you print some flyers? A mailer campaign? Online ads? You can find cheap but quality is more important. There are very few contract writers serving the mortgage industry. And they’re good. They know how to write and what they’re writing about.
Getting More Eyeballs
Getting eyeballs to your site is a challenge. You’re competing with millions of websites all clamoring for a visit. A site visit turns into a lead and a lead into a prospect and a prospect into a client. Successful mortgage websites know that getting quality leads means knowing who to compete with. To get the leads you want, it’s important to understand it’s not necessary to compete with every other mortgage lender on the planet but instead try to subset into a smaller category. Here’s what I mean. Open up your browser and search the term “mortgage.” Now look at the number of results your search returned. I used Bing for a mortgage search and got 21 million results with the term “mortgage” listed somewhere within the site.
Next, I entered “mortgage Texas first time buyer” and got back 16 million. If I add the term “condo” to that string, I get 3.6 million, and so on. The point is that I have a better chance of being on page 1 of the results page if I try and cater to a smaller subset of potential borrowers. You can mimic that and take advantage of this practice. SEO wizards call this “long tail” searches but simply means tailoring toward a more narrowed base. Yes, you might at first think that you’d rather be among the biggest pond but the likelihood of your pond being found among such a large group is small. Unless you know how to optimize your content.
When thinking of mortgage content for your website, try and get inside a potential borrower’s mind and imagine what they might type when searching for a specific product. When I’m looking for a product or service here in Austin, Google knows where I’m located and automatically pulls up local results. To narrow it even further, I get very specific with my search. You do too because you know how worthless a general search can be. For example, I have clients that ask me to write mortgage content for, “Jumbo loans with less than 20 percent down in Tulsa, Oklahoma.” That’s the specificity you need when putting content on your site. You need plenty of useful information on your site, but you need to get those searchers in the first place. You can do that with tailored content.
Getting Mortgage Leads from Referrals
I just finished a lengthy article for a client regarding mortgage loan referrals, where they come from, how to cultivate them and what to do when you get them. But as I was writing what struck me most was the different ways to get referrals and how successful mortgage loan officers today rely on at least a couple. Some of the more familiar ones involved real estate agents and working your database of past contacts and referral sources. Here are a few of the ones I highlighted:
Real Estate Professionals, Open Houses, Financial Planners, CPAs, Social Media, Past Clients, Niche Markets, Divorce and Family Law Attorneys, Referral Clubs, Content Marketing and still more.
After I finished the 2,000 word article this afternoon it really hit me on where the most of these referrals come from and how solid they are when you get them. Financial planners and CPAs probably get the nod in my book but at the top is Content Marketing. When consumers seek out information they may ultimately rely on personal referrals from those they trust but before they do any sort of reaching out they hit the internet and Google the questions they have. And when your site comes up as the answer on the first page of results, it’s highly likely you’ll get clicked. It’s at this stage where you need quality content, professionally written.
We all know how important blogs and articles uploaded to our site but in today’s digital world that’s simply how mortgage lenders get leads. Yes, no doubt personal referrals from trusted advisors are essential but so too is reaching out to as wide an audience as possible with updated content and quality writing.
512-924-6076 AUSTIN, TX EMAIL for More Information Now
Website Content: How Much, How Often?
Is there such a thing as too much content on your website? We’re not exactly sure but as long as the content is relevant and doesn’t appear “spammy” the more mortgage content you have the better. In addition to quantity you must also consider frequency. Should you post every day? Multiple times during the day? Once per week? Multiple times during the day is probably a bit too much but you do need regular activity on your site to let the various search engine spiders know your site is current, active and engaging. Note, this doesn’t apply to email marketing. You can email someone so often they’ll block you at some point. If a consumer signs up for your newsletter and then gets bombarded with multiple messages you’re more than likely to be blocked very early on. Research suggests that a post to your website three times per week is an ideal amount.
Further, note that if you have a site that is mostly images with very little content, it’s likely that page won’t be indexed. You need content that can be read by a spider who will then return the information back to the database, increasing your rankings. How much content on a page? When you make a blog post or an article, ideally your post should be somewhere between 350-500 words. There are those who require articles to be much longer, say 1,000-2,000, but that takes a dedicated author well versed in the mortgage industry. Writing about mortgages and posting the information online shouldn’t be performed by someone who is only a writer but doesn’t know very much about lending.
And finally, get started sooner rather than later. Search engines also give high marks to content that has aged a bit. The older, the better. If you add it all up, you need both legacy articles that will remain relevant for a long time, so-called “evergreen” content and you also need new posts to keep the website fresh keeping it high in the search engine rankings.
How Many Words is Ideal for a Mortgage Content Article?
Okay, so how many words per article should there be? What is the ideal number of words that will increase the likelihood that Google will rank you higher? That’s a good question and one of the more frequent ones as it relates to indexing and increasing visibility. In order to move higher up the ranking chain, here are a few things you need to consider.
First, it’s not the number of words but the content. Google and other search engines long ago figured out how writers would spam a document with multiple repeats of keyword phrases to the point where the article didn’t make sense. The content needs to be relevant. But there also must be a minimum count or otherwise Google will punish the site and lower its rankings due to spamming. If an article is 200 words or less, you can expect your rankings to be lower.
An article with say 2,000 words however, is considered well researched and well thought out. If someone searches for mortgage loans and comes up on a page with lots of information and the readers remain on the page throughout the reading, rankings will be higher. It does come to a point where too many words will turn a reader away once the actual length of the tome is realized. Readers want the information and once they have it they leave. Or even better, call you for more information.
So what is better, one 2,000 word article or four 500 word pieces? How about both? We suggest having longer “evergreen” material for example and shorter 500 word blog posts routinely uploaded to the site. This provides the longer content search engines like as well as a “freshness” date which we’ve talked about earlier. Build your library with relevant topics that will be relevant for years, such as an ARM vs. Fixed piece as well as uploading regular blog posts talking about the mortgage industry, trends and changes. If you build your site in this manner, your rankings will begin to rise.
How to Write a Book About Mortgages
Okay, so it’s not exactly the sexiest topic and it’s doubtful there will ever be a movie based on your new title but writing your own book about mortgages is one of the most powerful marketing pieces you can put together. Yet for most, writing such a book seems a bit overwhelming and even those with the very best of intentions seem to keep putting it off. And I’ll be there are hundreds if not more New Year resolutions that go something like, “I’m going to write a book this year.” Lofty goal but not out of reach. Here are some tips to get you through the process.
First work your chapter titles, then fill in the blanks. Imagine you’re talking to a first-time buyer and you’ve got all the time in the world to explain the mortgage process. You first prequalify the client. Write about this. Then immediately explain the preapproval process and compare the two. Write about the things a lender will ask for when a buyer submits a loan application.
Second chapter, explain how loans are approved using an AUS and loan officers ask for the conditions listed on the approval. Explain what the buyers can expect to provide and why. Why does the AUS ask for the most recent pay check stubs covering a 30 day period? Why does the AUS want tax returns? Simply put, use your keyboard instead of your mouth when explaining. Don’t look now, but you’re writing a book.
Third chapter, talk about credit and how lenders use credit scores. Explain how credit scores are calculated. Explain what is considered good credit, bad, average and excellent. Talk about the relationship between equity and scores. Talk about how to improve credit scores over time.
Fourth, talk about the sales contract and walk them through the approval process from start to finish. From ordering the appraisal to ordering closing documents, write out the process.
Five, begin a chapter about the different types of loan programs. Conventional vs. government. Conforming vs. Jumbo. Fixed vs. variable. This will be one of your bigger chapters.
You can even break up these chapters if you want to add more chapters or you can add as many as you like. Once you have your manuscript ready for editing, submit the book to a third party for a review. It’s almost impossible to edit your own work as your eyes see what they want to see, not what is clearly written sometimes. Beyond using the “Review” feature on Microsoft Word for spelling and grammar, a copy editor will pore through the edition with a fresh pair of eyes. Get your ISBN number and bar code online.
Once your edits have been completed, have the manuscript formatted. You can have this professionally done or with patience you can do this on your own as well. You’ll also want to have someone begin designing your covers, front and back. At this stage, it’s off to the printers. Or not. You can also convert the document to a .pdf file and upload your book to Amazon and other online retailers. Personally, I do both. But don’t try to market your book solely as a .pdf file, there are too many authors out there that are doing the same thing. Have your book printed and order about 100 copies. Depending on how many books you order, you can expect to pay somewhere around $5 per book for say 100 pages of text.
There. That’s it. If you take it step by step you’ll get there. It’s just like that old saying, “How do you eat an elephant?” Answer: “One bite at a time.” Or, you can just call me and I'll do it for you. The book, not the elephant.