If the only thing a borrower knows about you is your interest rate, shopping you is the logical move. When all a loan officer has done is take an application and quote a number, the borrower has nothing else to compare. Your rate goes on a list next to everyone else’s, and the lowest number wins.
Does that mean rates don’t matter?
No. Rates matter, and borrowers should understand their options. The problem is a decision made on rate alone, before anyone has asked what the borrower is actually trying to accomplish. If that conversation never happens, the loan officer hasn’t really done the job.
What should a loan officer ask before quoting a rate?
Start by uncovering what matters to the borrower. Four questions do most of the work:
• What are you trying to accomplish with this purchase or refinance?
• What concerns you most about this decision?
• How much money do you want to have left after closing?
• How long do you expect to own and live in this home?
The answers change which options make sense, and they change the conversation from “what’s your rate?” to “what’s the right choice for my family?”
What’s the difference between a transaction and a relationship?
Giving a borrower an interest rate is a transaction. Helping them make an important financial decision for themselves and their family is a relationship, one built on trust and on the value you bring. Borrowers can compare transactions easily. Relationships are much harder to shop.
How do loan officers stop competing on price alone?
Give people something worth valuing beyond the price. That work starts long before the rate quote: in the questions you ask, in how well you understand the borrower’s goals, and in whether you help them understand their choices or simply quote a number.
Bryan Lovell is VP of Sales at Highland Mortgage, where he coaches loan officers on building businesses around value, not price.