If you are in the business of providing mortgage advice, you know that it is strictly regulated to ensure that the client is advised on the most suitable solution for their needs. And that is absolutely correct.
The problem is that companies and individuals who are assigned this “counseling risk” don’t want to be wrong and be sued later with a visit from the Financial Ombudsman Service. So they’ve hardened the process almost to the point of asking questions in a script.
The consequence is a steamy experience for the poor customer. Not all, but a good 50% of mortgage deeds are suffocating, hyphenated, and questioning. It is not a joke. They’ve been structured by risk-averse compliance folks, and they’re really interviews. The irony is that they don’t have to be this way.
This article will show you how you can get the needs identified so that you can produce a strong recommendation for the right mortgage and give the customer a truly enriching and enjoyable experience while doing so. It is the best of both worlds.
Conversation of concrete facts
The investigation consists of several areas. A lot of hard data about the customer and then smoother information that includes criteria and preferences. We will start with the pure facts.
These are fairly easy to obtain. Most searches contain boxes for which you ask the appropriate question and then fill them out. They are great on a screen because they are used to fill out your assessment system, application forms, and suitability reports, thus saving a lot of time.
We want a conversation, not an interrogation or question and answer session. Many counselors are taught open versus closed and sugar coating techniques to ask more pleasant questions and have first-rate listening and empathy skills to keep the client talking, but it is still a question and answer session, albeit an enjoyable one.
To create a true conversation, you must use my conversation cycle technique. Let me explain.
The conversation cycle
A typical question session involves person A asking the question, person B answers it, person A follows up with another question, and person B answers. There is nothing wrong with that approach, but it is not a conversation. The conversations come and go and can go on for years. Let’s mix this up a bit.
Person A still asks a question and you can do all the sugar coating and smooth it out with this question, turn it into a high-gain curious open-ended question if you like, and Person B still answers it. But this time person A does some kind of recognition to encourage a greater response from person B.
This could be:
A verbal nod like “I see”, “That’s fascinating” or “Go on”.
A statement of empathy that shows you’ve experienced the exact same thing. A “me too” moment. For example, person B might answer the question about his Florida vacation when he swam with the dolphins. Person A would identify with “We were on vacation in Florida last year and the weather was great, but we didn’t make it to that theme park. It sounds like fun.”
A thoughtful phrase like “Swimming with dolphins must have been an incredible experience.”
Now, these recognitions make a huge difference. The goal is to allow person B to continue speaking and the conversation to start fairly quickly. But let me finish the loop in style for you and add a fourth item.
So person A asks a question, person B is kind enough to answer, person A then throws an acknowledgment, person B does not respond, so person A throws a “report.”
An “inform” is simply a statement, a precursor to another question. Some new context to launch the next phase of the conversation. It allows you to steer the conversation in the direction you are looking for. For example, following our story with dolphins.
Person A might recognize and say how fascinating it must have been and might add, “Vacations are a major expense for all of us, and many clients spend a good proportion of their disposable income on leisure and vacations.”
That’s the report: the context for launching another question like “What proportion of your disposable income would you like to spend on leisure activities?”
So that’s the cycle:
Question – Answer – Acknowledge – Report
And you can go back and forth, sideways, around the loop … there are no rules about it, just enjoy a good conversation instead of an interrogation.
Back to the hard facts
If we apply this technique to concrete data collection, you can see how it starts to work. Let’s play the role in which the mortgage adviser collects information about the client’s current job role.
“Let’s get into your current job, Mr. Khan, okay? Tell me where you currently work.”
While the customer is talking, our consultant, who is Inside Sales, makes verbal gestures. “Okay, I’m with you, that sounds interesting, I bet it’s difficult” and so on.
The client provides more information and the advisor completes his data search while the client talks, because he is good at it. The customer stops talking.
Our advisor comes in with a “report.” “Your company seems big enough to have a good corporate pension plan. Could you clarify a bit?”
And the client goes ahead and mentions his withdrawal date established by his scheme.
“Oh, so retiring at 65 means you can put your feet up once and for all. How important is it to have all your debts paid off by then, including the mortgage?”
We have now collected information on some criteria, so we are testing it to see if we can meet some identified needs for the term of the mortgage.
The moral here is that if you are simply collecting hard facts, listen to the clues that can help you collect soft criteria and needs as well.
Soft facts and mortgage criteria
Now we go to the mortgage needs section to obtain the criteria or the needs identified to be able to provide advice. There are several areas of need that counselors ask about: loan term, budget, nature of mortgage risk, interest rate concerns, etc.
Use the talk cycle in exactly the same way. Let’s return to the subject of the term.
Advisers begins with “The state’s retirement age is currently 68 for you, Mr. Khan. When were you thinking of quitting?” The customer speaks. The advisor continues: “That is exciting for you. I have more than 30 years before I can stop working unless they bring in robots to do my job. Many of our clients like their mortgages paid off as quickly as possible. What is your situation? ” in this?”
Mr. Khan gives information that he wants to be paid as quickly as possible. Then the advisor chimes in by saying, “Paying off the mortgage early sounds like a fabulous goal, Mr. Khan, but what budget were you planning on putting in the mortgage payments so that you could pay it off as soon as possible?”
This will give you the identified needs to recommend a term.
Let’s now take a look at a risk and mortgage payment method. “Mr. Khan, there are two ways you can organize your mortgage payments. How aware are you of these two methods?” Mr. Khan is not sure. “Do you want me to explain?” And it does. “What do you find you’re aiming for?” Mr. Khan likes principal and interest. “Yes, principal and interest are popular because you are sure you will pay the mortgage at the end of the term and there are no surprises. So certainty of paying is important, right Mr. Khan?”
“The certainty of repaying the loan is one thing, Mr. Khan, and this can also be related to the interest rate on your mortgage, which can also affect your attitude. There are a variety of mortgage interest rates that we have available, have you researched on these? ”Khan says he has looked at the fixed rate and likes this. “Yes, fixed rate mortgages have many advantages over others. May I ask Mr. Khan, what led him to these?” And it tells you that you like to be in control and know your payments, it allows you to make a budget. “I applaud you for that, it is so important to have control over your finances, especially when your home is at risk. Mr. Khan, do I hear that control and stability are vital to you here?”
And bingo, you have another identified need for a mortgage with bulletproof evidence of why Mr. Khan is right for that. Another way to do the type of mortgage is to go in and inform you of the different types.
“Mr. Khan, you know I am sure we have many different types of mortgages offered here at ABC Bank. How familiar are you with them?” “Okay, a lot of my clients like me to explain, will you let me do that for you?” Then the advisor explains the different types. And every now and then, he pauses and asks about Mr. Khan’s feelings about it. “So how do they sound so far, what do you like about them so far?”
At the end of the explanation, “Tell me your thoughts, please, Mr. Khan?”
“I see, it sure sounds good. Do you mind if I ask exactly why?”
And bingo, you have an identified need, all within a happy and pleasant conversation.
Budget again. “Mr. Khan, I remember that you like to have a firm grip on your finances. Many clients have a budget in mind that they don’t want to exceed. What is your position on this?”
And you are still in the same line.
Believe me, no animals or humans were injured in the making of this movie.