Mortgage Refis Are Dying as the Purchase Market Is Reviving

Sponsored by CU Members Mortgage

It has finally happened. Mortgage refinances have officially died. According to a recent article from Mortgage News Daily, mortgage refinances have reached an 18-year low this year, making it very evident that mortgage purchase loans are the business your credit union must  compete for in the spring homebuying season.

Mortgages have been on the decline in recent years and credit unions will want to make sure to be prepared for fierce competition. Here are some key steps to get ready:

1. Make sure your members know they matter. Your members and the communities you serve need to know that buying a home loan with a credit union is so much more than just financing. It’s an experience that reinforces your value and commitment to service. It’s personal service that shows them they are more than a file or a number. This is likely the biggest investment the member will make in their lifetime. Let that sink in. If it’s their biggest investment, shouldn’t it also be your biggest priority? Let them know that their home purchase is important to you, by offering a wide range of products, education along the way and, of course, great service. This will ensure that as the spring buying season inches near, your credit union is the first potential mortgage source on their list.
2. Make sure your communication is flexible. Communication is key to member satisfaction, so it should be consistent, clear and concise, but also delivered in the medium that your member requests. It won’t matter much if you’ve sent 10 instant messages to a member if he or she requested you call. Make sure your credit union is up-to-date with all communication channels, including instant messaging, text messages, emails and of course a simple phone call.  
3. Make availability and accessibly a top priority. Mortgage lending is a 24/7 industry with wide consumer demand for an online mortgage application. Your credit union is going to find it hard to compete without offering this option. If you have an online mortgage application, is it the latest and greatest tool available? Regular review of technology is necessary to stay relevant and competitive. Now is a good time to ensure that you have the right tools and, if you don’t, to get busy putting them in place.
4. Offer excellent mortgage education. Doing so will make or break the member experience. Home financing has changed since most people bought their last one. It’s now a more complicated process that often requires more back and forth with the member to get to the closing table. Setting proper expectations will help the member get in the right frame of mind and, believe it or not, that starts long before a member ever comes looking for a mortgage.  Education can be done with blogs, social media posts, branch interactions and many other ways.  It’s an opportunity to be the expert and the thought leader in your community. Doing this well will help your members reach their dream of homeownership. Education that starts now and continues every day becomes an added value to your members. 

Traditionally, credit unions have relied on and expected to see a constant wave of mortgage refinancing to keep their mortgage departments afloat. In a purchase money market, it’s going to take a bit more work to keep that stream of business coming in your door. Don’t delay and begin preparing now. 

Alison Barksdale is AVP/marketing for CU Members Mortgage, Addison, Texas.