Rethink Mortgage Lending Processes to Build Better Member Relationships

By Joe Puthur, Sales Boomerang Mortgage Coach

Credit unions often offer the best mortgage rates, yet the typical credit union finances the homes of fewer than 6% of its members. Your membership deserves better.

To help more members attain their financial and homeownership goals, credit unions need to take a holistic approach to mortgage lending. After all, homeownership is the primary means through which most members build wealth.

The recent change in mortgage activity presents the perfect opportunity for credit unions to recalibrate their approach to home lending and elevate mortgage lending alongside other core services, such as checking and credit cards. Credit unions that take a slightly different approach to providing mortgage services — one that involves integrated communications, expert guidance and well-timed, relevant outreach — can establish themselves as full-service partners in the wealth-building journeys of all of their members.

The benefits of a holistic approach to financial services are significant, yielding increased member homeownership levels and supporting stronger credit union financials. Here are three measures credit unions should take in a down mortgage market to grow member engagement in home financing services over the long term.

MARKET MORTGAGE LENDING ALONGSIDE CORE FINANCIAL SERVICES

Step one in cultivating greater mortgage engagement is to market home financing services prominently alongside other core financial offerings. This simple, yet frequently overlooked measure is inexpensive to execute and highly effective at raising awareness and driving interest.

When members join a credit union — typically to open a checking and savings account — an overview of mortgage services should be a standard part of the introductory dialogue. While new members may not be ready for home financing right away, they should be aware that as a not-for-profit institution, their credit union has their best interest in mind and is prepared to offer professional guidance, a variety of mortgage programs and competitive rates to help them achieve their homeownership and financial goals. Planting the seed early is important because it increases the likelihood that members will circle back about home financing when the time is right.

Furthermore, mortgage services should be advertised on all collateral. Adding signage to the teller area and graphics to ATM machines are all very simple measures that can drive interest. Even if mortgage services are not integrated within your banking app, it should feature messaging that invites members to inquire about rates, loan product offerings and homebuyer affordability programs. Similar messaging can even be inserted into mailed banking and credit card statements. Repeated exposure to these messaging breadcrumbs helps position your credit union as a one-stop shop for all its members’ financial management needs.

DIFFERENTIATE yOURSELF AS TRUSTED MORTGAGE ADVISOR

Finance professionals sometimes take their knowledge of asset and debt management for granted. In truth, most people are intimidated by complex financial transactions and want to work with a trustworthy financial professional who can guide them through milestone decisions such as purchasing a home. By leading with mortgage education and providing expert advice tailored to members’ unique financial and homeownership objectives, credit unions can provide a rare and highly valued service that builds loyalty and brand equity.

To earn a reputation as a trusted mortgage advisor, credit unions must ensure that members are supported by an empathetic, consultative lending professional. The mortgage team representing your brand must be knowledgeable enough to rise above the level of order taker and competently help members evaluate multiple loan scenarios to find a solution that best meets their unique financial circumstances and goals. To do this, credit unions must invest in ongoing mortgage advisor training and technology that enriches the advisory process by educating members about their mortgage options and helping them visualize the costs and benefits of a mortgage loan over time.

For instance, if a member requests a specific loan product, such as a cash-out refi, 20% down payment, or an FHA purchase loan, mortgage advisors should first learn more about what members are trying to accomplish financially before forging ahead. Most consumers are unaware that your credit union may offer unique programs that meet their specific financing needs such as down payment assistance, mortgage insurance, home equity products, debt consolidation, mortgages based on employment type and access to personal loans. Every additional option is a potential competitive advantage for credit unions.

A critical part of member education is making them aware of the best options available to them now, and importantly, what options may be available to them in the future. This not only prepares members for capitalizing on future opportunities; it also positions your organization to help them reach new financial milestones down the line.

Delivering a top-tier member experience that supports member utilization of multiple credit union services requires a cultural commitment from organizational leadership. It must become standard operating procedure to help members understand the impact of their financial decisions immediately and for years to come. Giving members transparency into their home financing options builds trust and helps them select the best mortgage strategy based on their evolving financial resources and goals.

Whether members seek to purchase their dream home, pay down debt, build wealth or accomplish any other number of financial goals, investing in training and technology that ensures your lending team is providing transparent, smart, personalized mortgage advice will promote member confidence in the home financing journey and raise credit union mortgage volume.

CONNECT WITH MEMBERS WHEN THE TIME IS RIGHT

Credit unions seek to provide members with affordable pathways to sustainable home ownership. Advanced borrower intelligence systems, which until a few years ago had only been used by big banks, are now accessible to credit unions that want to ensure that no borrower is left behind. While such a solution may sound too good to be true, recent technological advancements have made borrower intelligence one of the most cost-effective tools for proactively identifying and understanding every member’s financial needs.

Borrower intelligence platforms analyze member data against external data sources to alert lenders when members may be looking for a mortgage loan and prescribe what type of financing opportunity is likely the best fit. These systems are crucial for strengthening member relationships, driving mortgage engagement and helping credit unions grow homeownership within the communities they serve.

Credit unions that leverage borrower intelligence to monitor their database position themselves as the very first to know when a member’s financial situation changes or when a member’s actions signal interest in buying a home. Importantly, borrower intelligence can alert credit unions to promising opportunities that likely would have been overlooked — even opportunities that consumers may not be aware of, such as lower rates, equity accumulation and credit qualifications. This proactive insight can act as a launching point for conversations about affordable home ownership, renovations, investment properties, debt optimization, cash access and more.

Moreover, integrations with external data sources can inform credit unions of life events that are frequently associated with home financing, such as getting married, having children, changes in employment, military affiliation, credit improvement, equity growth and listing a house for sale. When these insights are viewed in combination with member activity at your organization, such as direct deposit status, you can unlock a new level of member engagement. By reaching out to members at the right time, with the right loan, credit unions can earn their business before another lender does.

One of the great aspects of mortgage lending is that it is not limited to a single transaction. Homeownership and financial needs change over time, positioning mortgage management as an excellent avenue for providing value to members over the long run. By continuously supporting members with wealth-building opportunities and financial education, credit unions can fulfill their objective of enriching members’ lives as their needs evolve.