How Do Homebuyers Choose Their Mortgage Lender?

From: Ameen Kamadia

Dear Friend,

How Do Homebuyers Choose Their Mortgage Lender?

Interesting question. And the answers will surprise you.

But before I give you the answers, what do you think are the main reasons people choose a mortgage lender? Come on, think a little.

I asked a few brokers in my office, and here were the top three responses:

  1. Lowest rate/fees
  2. Referred
  3. Advertising

What are your top three?

The National Association of Realtors mailed out an eight-page questionnaire to 35,000 recent homebuyers. The survey resulted in 2,703 usable responses with an adjusted response rate of 7.7 percent. Customer names and addresses were obtained from Experian, a firm that maintains an extensive database of recent homebuyers derived from county records.

If you want to get a copy of the results, you may purchase them at

Now, here are the results:

75% of all buyers bought their house through a Realtor. 14% bought directly from a builder.

76% of all buyers, used only one agent to help them search for a home. – Buyers are showing a lot of loyalty to agents.

69% of buyers received a recommendation from their agent about where to get their mortgage. The majority of first time buyers asked the agent for help in finding a lender.

36% of buyers, said that the most important reason they choose a lender, was because of the agent’s recommendation. And keep in mind, that most realtors are not trained properly in how to send business to the lender.

And 41% of them got their information about mortgage lenders from their agent.

14% of buyers chose the lender on price.
16% of buyers chose the lender on reputation.
14% of buyers used the lender they had used before.
13% used the lender they were recommended to by a friend or relative.

Above you can see that 49% of buyers chose their mortgage lender because they were referred either by the agent, or a friend/family member. Our company can help you crack the referral market. Referrals are the easiest loans to get and the most lucrative. See our website for more details.

Only 14% chose based on the price. And you can be sure that the lenders that were referred, did not offer the cheapest price.

One more stat you need to know is this:

48% of all homebuyers got a quote from only ONE mortgage company when getting their loan. And 28% got quotes from two companies.

Since 49% of buyers were referrals and 48% didn’t shop the loan at all, it is not an off the wall guess to say that people who are referred do not even bother to shop the rate they are quoted. They have such confidence in the lender, because someone (a third party) told them that the lender was good. Based on that information they put total faith in that lender.

If you want to be in that situation, where people are just sent to you by others, and you can charge them whatever you feel like charging (as long as it is competitive and reasonable), then you need to put this system into place right away.

If you are not getting referrals, then you do not even have a chance at getting a loan from almost half of all the borrowers. On the other hand, if you do get referrals, you essentially have no competition whatsoever.

You should also think about getting some Realtors to be partners with you. By setting up business partnerships with realtors, by helping them grow and get more business, you will have the most important piece of the referral puzzle on your team. As the numbers say above, Realtors control at least 36% of the people buying homes. If you are not working with Realtors, they are sending these buyers to someone else, when they could be sending them to you.

And getting Realtors on your team is not as hard as you might think. Especially if you have The Marketing To Real Estate Agents Toolkit. It’s available at And it has everything you need to get Realtors to call you, wanting to work with you. You owe it to yourself to at least check it out.

Happy Originating!





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