How to Increase Your Mortgage Closure Rates Substantially

There are no two ways about it – closure rates matter. Banks, trust companies, credit unions, mortgage investment corporations and many other institutional mortgage lenders realize and pay very close attention to your closure rates. The reason is obvious – low closure rates means that deals are not closing and there is major expense associated with a mortgage application that fails to close.

Learning how to increase your mortgage closure rates means instituting measures at the application stage to catch information that may be misstated or not disclosed in the mortgage application. Funny enough, it doesn’t take that much leg-work to save your lenders and yourself a world of pain wasting time on deals that don’t end up closing.

Ask lots of questions and listen. When you take the application, ask your clients:

•  If it is a refinance, ask when they purchased their house and what they paid for it. Find out how much the mortgage was at the last renewal/refinance – this can help you identify before doing any work at all if your client is way off on their equity positioning.
• When discussing income, ask clients if they get a paystub with tax deductions. This will help you from learning later that a client who you thought was employed is in fact a contractor or self-employed.
•  Ask the client if there are any other people on title. This comes up quite often in instances of refinances as some people simply forget or don’t realize that they did put a spouse, parent or child on title.
• When discussing the client’s mortgage, ask the client what the mortgage balance was when they purchased the home. If the home was purchased in the past 6-7 years you can guestimate more or less if they are in the ball park on what they think that they owe on the house.

Asking the above questions alone will help you avoid wasting time on applications and allow you to focus your time on good deals and to identify upsell opportunities thus increasing your closure rates.

To increase your closure rates that much more, value and equity position are the next two things you will want to look at a little bit closer.

Many brokers are now using AVMs (automated valuation model) prior to submitting their deal to their lender. Using an AVM, you can validate if the sale price/estimated value is accurate. These come in really handy, especially in hot areas in large city centres like Toronto, because there have been substantial increases to property values. Depending on the AVM tool you are using, you may also be able to look at existing mortgages to validate if the mortgage information provided in the application is accurate.

Substantially increasing your closure rates will go a long way to strengthen your relationships with your lenders – especially A lenders and FIs who track closure rates closely. The little time it takes to perform a little bit of extra due diligence, through questions and searches, represents so much value on so many levels that it only makes sense.

For more information about increasing your closure rates please contact Purview For Mortgage Brokers today at 1.855.787.8439.