Many buyers believe that the stability of a set payment makes a fixed-rate mortgage the smarter choice. As a loan officer, you have the ability to change their minds through education if you want to sell adjustable-rate mortgages. These tips will help you succeed.
Focus On The Value Of ARMs
To make buyers fully comprehend the advantages, you have to convey the value of each benefit in terms that apply to them. These are some examples.
ARMs have lower interest rates and payments early in the term. For a buyer who loves amenities, this may mean more money to spend on new appliances or upgrades for a first home. Alternately, they may be able to afford a better home than they would with a fixed long-term mortgage. For the budget-conscious buyer, lower payments and interest mean more money to save for unexpected expenses.
Buyers enjoy decreasing payments when interest rates fall. Every buyer can appreciate not having to pay more fees and closing costs later on to refinance when rates fall. Borrowers should see this type of loan as a perpetual and automatic no-fee refinance.
An ARM provides a cheap solution for short-term housing. For buyers who are looking for a starter home or a home to live in while they are on a temporary work contract, the affordability of an ARM is unbeatable.
Know How To Navigate The Disadvantages Of ARMs
Buyers will inevitably cite the disadvantages of ARMs if they are leaning toward fixed-rate mortgages. Here are some examples of disadvantages and their corresponding rebuttals.
Payments can rise sharply if interest rates spike. Interest rates have not spiked astronomically in a long time. The lower payments enjoyed during most of the ARM usually make up for any short-term increases.
ARMs are hard to understand. This is true. However, you can put your borrowers at ease by making a simplified list of terms and explaining clearly how the loan works.
Sell The Loan Repeatedly
Successfully closing ARMs means selling and reselling your reputation, the lender and the loan product itself. Remember that it takes an average of five meetings with a prospective borrower to earn a sale.
Learn About The Borrower
Listen carefully to learn exactly what a prospective borrower wants. To ensure accuracy, rephrase and repeat their goals and concerns to them. Develop an actionable plan to meet their goals.
In a competitive market, you must be available at odd hours and respond quickly when contacted. Be friendly and approachable. It is natural for borrowers to have doubts about a mortgage that comes with some unpredictability. However, the key to overcoming those doubts and ultimately closing the deal is for you to always remain confident and optimistic!