We know we’re the experts when it comes to home loans, and that our job is to educate borrowers on their various options as they pursue their version of the American Dream. However, the new FREEandCLEAR Mortgage Survey is really eye-opening when it comes to how little borrowers actually do know about mortgages and the application process when they step into our office.
The majority of borrowers (63 percent) only learned about the mortgage process when they were filling out applications. Most took their knowledge from the internet, their realtors and lenders. What’s even scarier is that more than 10 percent of survey respondents didn’t know who Fannie Mae was. They identified “her” as everything from the first female U.S. senator to Alexander Hamilton’s wife.
It doesn’t get better from there. About 28 percent of borrowers answered incorrectly when asked what mortgage length would result in the least interest paid when given the choices of a 10-, 15-, 20- or 30-year term. An astounding 7 percent simply answered “I don’t know.” Another 18 percent of respondents believed the monthly payment on a fixed-rate mortgage was subject to change over the life of the loan, while 80 percent said they were unaware that the monthly payment on an interest-only mortgage is subject to change over time.
Before you throw up your hands in disbelief, use this information as a learning opportunity. It’s clear there is a lack of knowledge regarding mortgage products. Let this work to your advantage. Become your clients’ and prospective borrowers’ trusted source for all things mortgage-related. Make sure your materials and communications are clear, precise and easy to understand. The typical barometer for explaining any concept in any industry is whether you can successfully sum it up in a manner that a fourth grader could understand.
You can further build trust and keep clients’ attention by making eye contact, speaking slowly, pausing between concepts, and asking if they understand or if they have further questions. No one is an expert at everything. We have our shortcomings as well – and chances are, we would want the experts in those industries to treat us with a high level of patience, empathy and respect as we learn the ropes. Be sure you’re doing the same for your clients.