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How To Make Money With Second Mortgages!
Written By: Karen Deis
FACT: According to the FNMA, over 80% of the mortgages
in the US are at an interest rate of 6.75% or less.
If you are still thinking that there are plenty of mortgages to refinance out there, reality is that you (and a million other loan officers) are chasing a 20% refinance market.
Mortgage rates have increased. The other 80% are not going to refinance. They will be staying in their homes longer. Home improvement will be huge. They still need cash.
Second mortgages and home equity lines of credit may just be the next best alternative for loan originators. Not only in the short term—but as a long-term client- retention
strategy as well.
Let me explain:
Short Term: There is money to be made in home equity lending.
Long Term: You have a chance to refinance a 1st and 2nd mortgage when rates change again.
Why do you think the banks are advertising the heck out of home equity loans? Because there’s money in it! And, by the way, not only will the bank try to sell them services when the time comes; they will solicit them to refinance their mortgage too. A lost client! Moral of the story: Don’t refer them to a bank!
Hey, the client already knows you right? The bankers are pretty impersonal, right? Why not take advantage of the information in your loan files (or database) and start dialing for dollars!
We interviewed quite a few loan originators and wholesale reps for this article, and have featured 4 originators who had some great insights—and were willing to share their unique ideas on how they make money with the home equity niche.
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