Are interest rates the only thing on your client’s mind?


We know it’s not all about interest rates, it’s your job to make sure your client knows this too.   

Many consumers are under the impression that a low interest rate is the most important factor to be mindful of when considering a home loan. Often consumers have been mislead by the media and common hearsay to believe that interest rates and fees are the only important things to consider when selecting a loan.

As a broker you should know that interest rates and fees aren’t the only factors to worry about, there is much more to it. To help your clients discover for themselves what other factors are important to them, you will need to learn strategies to alter their thought process.

Changing your mindset and your consulting methods

In your first consultation, steer clear of talking about rates (even though you might think this is what your client wants to hear). Instead, start by asking plenty of questions to find out more about your client and their situation. Before you attend a meeting with a client, make sure that you prepare a list of questions that will really get your client thinking, considering and identifying needs. By asking questions, instead of feeding them information, you will eventually lead them to the right decision.

There are things that may be equally, if not more important, than the rate of the loan. Examples may include things such as borrowing capacity or property valuation amounts.

Once you have an in-depth understanding of your prospects needs and values, then you can begin discussing rates and fees in a more appropriate context. With a broader vision of the bigger picture, your client will have the ability to weigh up how important rates and fees are in relation to everything else.

For example, if a client has an existing property and wants to purchase another property, the first thing they should be concerned is how to do it safely, minimising the risk of ending up with two properties and not being able to afford the repayments. Interest rates should be considered but should not always be at the forefront of one’s mind as the most important factor.

Make yourself a promise that you will try your best to avoid discussing interest rates with a prospect until you are completely satisfied you have a holistic understanding of them and their values first.

KEY TAKEAWAY: As a broker you know that finding the ‘best’ loan for your client is much more complex than just finding the lowest interest rate. Interest rates play an important part of the process, but there are many other factors that are just as crucial that a lot of consumers are not aware of. Don’t take the easy way out by just finding the lowest rate, your client doesn’t know any better, you are the one with the expertise and you should be sharing your knowledge with your client. The way to a strong long-standing relationship begins with educating your client.

Disclaimer: The information provided in this article is not legal or financial advice. It has been prepared without taking into account your objectives, situation or needs. Before acting on this information, you should consider the appropriateness of the recommendations, having regard to your own objectives, situation and needs. We encourage you to consult a professional before acting on any suggestions provided in this article or on this website.

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