For smaller lenders, Q4 2022 is prime time to shine. While the economic forecast is uncertain, our industry is saturated with lenders, brokers, and consumers, all looking to sell and snap up a good deal. With this competition around, it can be easy for local lenders to slip through the cracks of the market and feel insignificant next to big mortgage players with louder reach.
BUT while it might seem as if big lending names are dominating the industry, it’s actually smaller lenders who make up over 85% of the market.
The key is for local lenders to pinpoint their unique advantage over major industry players. Yes interest rates are climbing and the market is challenging but while the number of mortgage loans has declined, the US dollar is strong, and student debt forgiveness programs are leaving some with savings to spare. And, right now, consumers want to support local businesses. Smaller, lenders should draw inspiration from what large established lenders are doing right and replicate (then better) those practices.
This period of stagnant sales should encourage local lenders to fill the gaps in the market these household names aren’t currently filling.
What can small lenders learn from the big players?
There’s a reason why the big lenders are household names; they have spent decades building a reputation for giving consumers reliable loans. They attract customers by advertising simple, clear rates, and convert them by meeting their pain points. Offering products out-of-box and providing straightforward services makes buying from well-known mortgage players feel safe for consumers.
Local lenders should look at replicating this on a more personal level. Established lenders have built their reputations on trust so it’s critical to consider how to imbue this in a consumer during a sale. Trust is a major component of market competitiveness and is what closes deals. Using a third-party broker or technology solution is one way to quickly ‘outsource’ your trustworthiness.
What edge do local lenders have?
While it might seem that the big players reach every corner of the United States, the truth is much more local! Boutique lenders are crucial in rural U.S. communities; in one in five counties, they are the only banking presence. They are the sole touchpoint for many in rural communities to access mortgage products.
Some consumers crave a physical connection with a lender that extends far beyond an automated chatbot online. This is where a smaller lender shines. Local lenders have a much more intimate relationship with their customers in a way that the big players cannot duplicate. Smaller lenders provide in-depth, tailored advice to customers, educating and informing them on the different considerations needed to access each loan option offered.
The unique competitive advantage local lenders have over the major players in the mortgage industry is their ability to adapt their products to suit their customers’ needs. They can create niche loan options that suit their customers’ financial and lifestyle needs far more easily than larger competitors.
Reach above the competition with tech-forward initiatives
Technology has transitioned from an afterthought to a vital tool for lenders to ensure their businesses survive and thrive. This is especially true when offering a more involved, boutique pitch and sales process, when time and resources are best spent with a customer, and not on tasks that can be automated.
Manual, slow and labor-intensive loan processes detract a lender from time with their borrower; so it makes good business sense to find software that speeds up the mortgage application process.
Using a well-reputed software provider can also give you a better online presence, meaning when consumers inevitably search for you, they see hits from websites other than your own, reassuring them in a similar way that would make them feel comfortable with a well-known brand that is easily researched about.
The tailor-made software ReadyPrice offers covers both of these, while making the underwriting process fast and easy and minimizing risk for consumers and lenders alike. With their technology, ReadyPrice helps lenders deliver loans to brokers and customers with a click of a button – without hassle, or a middleman – with the aggregated trustworthiness of the other lenders in their portfolio.
The ReadyPrice team helps lenders promote their products using targeted marketing strategies such as spotlights, marketing blurbs and winter ads. This is at no extra cost to the lender and provides the perfect opportunity for lenders to stand out in the market and promote their products.
Crush consumer pain points
Customers crave more communication and support from lenders throughout the loan process, according to recent insights from Ellie Mae. Utilize this in your position as a local lender, cast your net far, as it’s likely those leads will convert.
Fuse these competitive advantages with what is needed to overcome big mortgage lenders; specialized industry technology like ReadyPrice.
Selling products on ReadyPrice gives exclusive access to two, regularly updated, special industry reports that offer key insights over your competition.
The daily lender market report provides insights on how you stack up against other lenders based on the interest rate. The monthly lender report summarizes your most requested and viewed products on the ReadyPrice platform. You can evaluate what is trending in the market and how impactful those products are.
To see how ReadyPrice can bolster you like a major player, request a free demo today. ReadyPrice software is so easy and simple that in only 15 minutes the team can demonstrate all the features you need to deliver top loans to buyers.
ReadyPrice specializes in working with regional wholesale lenders that have competitive pricing, a more boutique style and can offer tailored programs to customers, if that’s you, what are you waiting for?