As a loan officer, what are you truly selling?
Here’s the truth: No one walks into your office dreaming about a mortgage. The consumer wants a home. And the real estate agent wants to help them buy that home.
Loan officers can sometimes get caught up in mortgage terms and features when they should be focusing on what borrowers and referral partners actually want. And mortgage insurance (MI) is one of the strategies that loan officers can use to help borrowers and agents meet their ultimate goals.
Understanding this shift in perspective can transform how you present MI and other options to differentiate yourself from the competition.
How to talk about MI with consumers
When you talk with borrowers and potential borrowers, focus on the benefit of MI to them.
Keep it simple. Emphasize that you offer multiple options and will recommend what makes sense for their unique situation. Here are just a few of the borrower types who might benefit from MI:
Borrowers who don’t have 20% to put down on a home
Benefit of MI: Buy a home sooner instead of waiting to save. During the time they wait, home appreciation will likely push prices higher, and they won’t be earning equity.
Borrowers frustrated in their home search
Benefit of MI: Expand the home price range by introducing MI as an option. Let’s say a borrower has $40,000 saved. They could put 20% down on a $200,000 home, 10% down on a $400,000 home, or just 5% down on a $800,000 home (assuming they qualify for the payment). MI opens doors to more properties that may match their lifestyle goals.
Borrowers who want to renovate
Benefit of MI: Afford to turn a blah house into a dream house. According to the National Association of Realtors' 2024 Profile of Home Buyers and Sellers, 23% of people who bought a home last year felt they had to compromise on the condition of that home. Borrowers who put less money down can use other savings to renovate immediately.
Of course, both Fannie Mae and Freddie Mac have terrific renovation programs, and MGIC is proud to insure them. The FHA has some options, too. But those renovation programs may come with some extra requirements, and for some borrowers, using MI to put less down and use the funds they have saved to make repairs or improvements can be a simpler option.
Borrowers with other financial goals
Benefit of MI: A smaller down payment allows borrowers to keep cash for other purposes. Whether they're a first-time homebuyer or move-up buyer, don't assume clients with 20% to put down should use it all. Show them options. For example, if they put 15% down instead of 20% on a $420,000 home, they keep $21,000 in savings. Yes, their monthly mortgage payment will increase, but it would take years to recoup that $21,000. That preserved cash provides flexibility for investments, college funds or unexpected expenses.
How to talk about MI with real estate agents
The benefits to borrowers above also benefit real estate agents, creating more options in the homes they show.
When you talk with real estate agents, focus on how MI can help them solve problems and expand options, leading to more closings. MI can help you position yourself as a mortgage expert who creates solutions for your referral partners.
Your message to real estate agent partners is that you offer mortgage options and strategies that can help them:
- Expand their pool of potential buyers
- Show homes in higher price ranges
- Show homes that may need renovations
- Work with buyers who have competing cash flow priorities
If you're ready to seize the opportunity to educate real estate agents about MI, check out our ready-made presentation.
Leverage your expertise
At the end of the day, borrowers and real estate agents don't need to understand every technical detail about MI. They just need to know you're the expert who will help them achieve their homeownership goals.
Looking for more tips on this topic? Watch my recorded webinar on how to present MI to real estate agents and consumers.
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