What Mortgage Lenders Can Do To Prepare for Lower Mortgage Rates

As mortgage rates have held relatively steady this year, mortgage originations have somewhat stagnated. But it looks like things could be starting to turn around. 

As experts predict rates will start to fall later this year, many would-be borrowers are expected to come hunting for the right loan for them. That means it’s time for mortgage lenders to get ready. 

Mortgage interest rate outlook — and its impact on borrowers

A 7% interest rate on a 30-year fixed-rate mortgage isn’t anything new. People paid that rate back in the 1970s, and we saw similar rates through much of the 1990s and early 2000s. In fact, Federal Reserve Economic Data (FRED) shows that the rates we’ve seen in the last year or so are comparable to what borrowers paid in many eras of the last 50 years. 

Still, though, homebuyers often have shorter-term memories. And they remember the record-low rates we saw in 2020 and 2021. By comparison, the 7-ish percent rate of today feels steep. 

As a result, a lot of would-be borrowers report that they’ve been waiting. A recent poll of potential first-time homebuyers found that 71% said they were waiting to purchase until rates dropped. 

Mortgage lenders have certainly felt this. Applications for new home loans have been decreasing. FRED data shows that originations have been taking a tumble. 

But it looks like things are starting to turn around, both for would-be homebuyers and mortgage lenders. Rates have started to tick down and the economy is looking up. As inflation cools, it looks like the Federal Reserve will finally slash rates, further driving mortgage interest down. 

If all goes as many experts expect, rates will fall — and the potential borrowers who’ve been waiting for precisely this moment will start shopping their options. As a mortgage lender, that means you’re in a prime position to seize the opportunity that’s likely to be coming your way. 

Preparing for rates to drop

Taking some steps now sets you up to snag as many borrowers as possible once they start seeking out home loans. We have three suggestions to help position your lending operation well. If you want to beat out the competition and incentivize borrowers to choose you, do these three things: 

#1: Make sure your site displays live rates

First up, you want to make sure that when potential borrowers visit your website, they’re getting the information they need. The ability to see and compare rates is a highly valuable tool — and one most consumers expect. Plus, your competition is absolutely displaying rates on their sites.

It’s not enough to have a static table. As rates come down, you want to ensure that your website reflects the latest data. If you don’t, you could lose business. 

If a house hunter is gathering up rates online, they’re probably looking at a few different lenders’ sites. If your competitor has the latest rate data and it shows a lower rate while your static rates still read high, who do you think they’ll choose?

Don’t worry that you need to add a bunch of work to your plate here. There’s no need to manually update rates. We have tools that can pull data from your product pricing engine (PPE) into rate tables on your site. This way, as rates come down in your PPE, that decrease is near-instantaneously reflected on your website. All without you having to lift a finger. 

#2: Partner with advertisers that display rates

Having live rates on your site helps you appeal to more borrowers by providing them with the information they want and showcasing how rates will likely be decreasing. But how do you get in front of house hunters who don’t visit your website?

That’s where advertising opportunities come in. With options like Bankrate, LendingTree, NerdWallet, and SmartAsset, you can get your loan products in front of a much wider audience. Bankrate, for example, averages 4 million monthly views on its mortgage pages. 

Advertising with one of these websites gives you the opportunity to put your rates in front of high-intent consumers. By the time someone’s researching mortgages online, they’re likely serious about buying a house and getting a loan. (Most people don’t explore financing options just for fun.)

And if you already have your PPE teed up to feed rates to other sources, getting started with these advertising opportunities should be relatively easy. 

The biggest challenge here is deciding which website you should choose to put your ad dollars toward. We have a quick overview of four leading options to help point you in the right direction. 

And if you’re still not sure which best suits your specific lending institution, talk with our team. We have extensive experience helping our clients get set up with these advertising opportunities. As a result, we can make a recommendation that’s tailored to you — and based on where we’ve seen success in the market. 

#3: Use email campaigns to spread the word

Your email list is a powerful tool. While some borrowers are eagerly checking rates waiting for them to drop, others have put it out of their minds for now. With a rate alert email, you notify them about the friendlier rate environment. 

Targeting email campaigns to past clients and prospects gives you a way to surface all of the borrowers who have been waiting for rates to come down. And when you leverage an automated system to get these emails out on a regular basis, you keep the opportunity top-of-mind for folks. 

With some strategic action now, you’ll be ready to take advantage of the influx of borrowers that should come with dropping rates. And getting prepared doesn’t have to mean taking on a bunch of work now — then prepping for more work as applications roll in. Our team at BankingBridge can make it simple to act on all three of the above suggestions.

If you want to demo our tools to see just how easy it can be to get live rate tables on your site, get set up to work easily with advertisers, and activate email campaigns, we’re available. Schedule some time with our team at your convenience.