NMLS #2498240

The Emotional Loans

Discover the emotional side of mortgage lending. Learn how to take actions over your credit, income and savings can empower you, reduce stress, and make homeownership more affordable.

In the world of mortgage lending, it’s all about the numbers. But when you’re searching for and purchasing a home, it’s a mix of logic and emotion.

You have a list of requirements in mind, such as square footage, bedrooms, school quality, and proximity to work and shopping. However, there’s also the emotional aspect, as you fall in love with a property and imagine the life you could have there. Real estate agents often say, “Marry the home, date the rate,” acknowledging the emotional connection.

Once you find your dream home, the next step is figuring out how to finance it. Surprisingly, our recent research shows that there is a strong emotional component to the financing process. Going through the mortgage application is a rare occurrence for most, and it’s a significant decision in their lives. We conducted a customer survey to better understand how they think about their credit and the mortgage application process.

The results revealed that while logical reasons like saving money over the life of the loan ranked high, there were also emotional factors. Participants mentioned feeling more confident about getting the best interest rate, being empowered to work with their lender, reducing the mystery and fear in the process, gaining confidence in their ability to qualify, and alleviating some of the stress.

The mortgage application process can be stressful, with anxiety building as the deal approaches the closing table. But for borrowers, a mortgage represents a life-changing event, while for loan originators, it’s just another transaction. To build trust, it’s crucial for loan originators to demonstrate empathy and understanding.

By helping borrowers improve their credit score, you empower them, boost their confidence, demystify the transaction, and reduce their stress. This not only benefits those who need help qualifying for a mortgage but also allows well-qualified borrowers to make more competitive offers and lower their cost of homeownership. Even if an improved score doesn’t yield significant benefits for some borrowers, the effort and dedication you show them increase transparency, build trust, and ultimately help you close more loans. In a highly competitive market, focusing on the emotional aspect of the borrower’s experience is essential.

By understanding their journey and providing meaningful solutions, you can create lasting relationships, stand out from competitors, and contribute to the success and happiness of your borrowers.