Opinion: Five keys to effective communication with borrowers

Any mortgage lender will tell you that clear and rapid borrower communication is critical to effective customer care. Homebuyers think about their purchase journey 24/7, and any delay in communication tends to leave the borrower worried that something has gone wrong or that they are missing some key piece of information.

Homebuyers have seemingly countless tasks and responsibilities in the process of purchasing a home and obtaining a mortgage. Now, consider the fact that these customers are in foreign territory. They simply do not know how to navigate the mortgage terrain without clear guidance.

Consider, for example, just one aspect of purchasing a new home in 2023: obtaining mortgage insurance. Most borrowers don’t even know what mortgage insurance is, let alone how much it adds to their cost. Then try “selling” mortgage insurance to someone who is required to pay for it but who receives zero benefits from that costly investment.

The same holds true for a borrower who is tasked with redefining a personal monthly budget. That is a conversation that rarely comes up with a loan officer, and yet the consideration of higher monthly costs weighs heavily on the customer’s mind. What compromises will they have to introduce to their lifestyle? What are the unexpected new costs? Can they still enjoy their lives when they are saddled with a costly mortgage payment?

These are considerations that a customer carries privately and adds to their mental strain. How much additional stress is introduced in the absence of quality communication from their lender?

Lenders must place a premium on both the speed and quality of their communication. Below are five strategies to help any lender accomplish that goal.

Key Communication Strategy #1: Update calls are sales calls

The objective for the lender is to sustain the positive emotional state of the customer throughout the entire purchase transaction. A customer’s emotional altitude is a measurement of their positive emotional engagement throughout the process. At the time of purchase, that emotional altitude is elevated, but after the contract is written and the mortgage is applied for, the emotional altitude tends to wane.

For that reason, every update call must be seen first and foremost as a sales call. The updates should represent an exciting and emotionally elevated conversation with the customer.

Start with a comfortable chat about their life, not about their loan. Congratulate them and encourage them at every opportunity. Keep the overall strategy in mind, and that is to elevate the emotional altitude.

That can only happen when the lender and the builder are on the same page. Anthony Grasst, national sales director at Homebridge Financial, suggests that communication with the builder sales rep is critical. “Lenders must integrate into the sales process. They can no longer be outside or ancillary services after the buying decisions get made.”

Key Communication Strategy #2: The borrower goes first

Borrowers are thinking about their purchase process all the time. There is always a question on their mind and they always have a concern they are processing. You may have something important to communicate in an update call, but you will not get the benefit of their full attention until they first feel heard. For this reason, keep this principle in mind during any update call: the borrower goes first. The customer will respond better to your updates if they’ve had a chance to share their concerns first.

You can say to a customer, “I’ve got some things that I want to update you on, but why don’t you go first and tell me anything that’s on your mind and any concerns that you might have.”

Key Communication Strategy #3: Update without updates

Your customer desires constant and continued communication and updates. But sometimes there are no updates to offer.

Call them anyway. Call them to simply say, “I don’t have anything new to add, but I want to check and see what questions you have and any concerns that you might be dealing with right now.”

The fact is that proactive communication, even with no “new news,” keeps the customer from experiencing unnecessary anxiety.

Key Communication Strategy #4: Making promises you can beat

You don’t get credit for meeting expectations. You only get credit for exceeding expectations. When you only meet the expectations you set, you are rewarded with customer satisfaction. But when you exceed those promises, you get customer elation — and that should be our goal. For that reason I offer this advice: only make promises that you know you can beat. Not meet. Beat.

Think about a restaurant host telling you that it’s going to be 30 minutes before you are sat. If they seat you exactly at 30 minutes, your response is, “well, that’s what they said they were going to do. I’m satisfied.” If they seat you at 32 minutes you say, “They’re late; I’m not happy.” But if they seat you in 20 minutes, you’re delighted that they exceeded your expectations.

It’s the same thing for you. Only make promises that you know you can beat. If you promise to call them by 4 p.m., call them by 2 p.m. If you expect something done by Wednesday, promise Thursday.

Key Communication Strategy #5: Speed is your secret weapon

Borrowers are experts when it comes to obsessing over their concerns. They think about those issues every waking hour. When they ask a question of their lender, they can’t truly rest until they have an answer.

Speed in buyer communication is absolutely critical. Do not let an extended amount of time go by without getting the buyer at least some information. It’s better to give part of the answer to their question now while you’re gathering more intel.

You can always say to the customer, “Let me address what I can right now, and then I’ll do some homework and I will reach back out to you by four today.” Of course, that means that you’ll be reaching out to them by two today.

Grasst puts it this way. “Respond immediately to any buyer inquiry — by text or by call. Fast responses convey importance and value to the buyer.”

Buying a home and obtaining a mortgage is destined to create numerous stress points in the buyer’s mind. Effective communication can ease so much of that stress and provide needed cognitive comfort. Empathy for the customer’s emotional journey is critical to first understanding the experience and then responding appropriately. Put yourself in your customer’s shoes. Effective and speedy communication is what you would value more than anything else.

Your borrower is going through a stressful and emotional experience. Whatever you can do to increase the speed and the quality of your communication will make the purchase experience far more enjoyable.

Jeff Shores is the author of, “From Contract to Close,” and founder of Shores Consulting.

This piece was originally published in the February/March 2023 issue of HousingWire Magazine. To read the full issue, click here.