Overcoming customer mindset of unable to buy
Do renters believe they cannot buy?
How do you overcome this with customers?
What are some of the hardest things to overcome with this?
How do you build trust with customers?
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12 responses from the Newspage communityCopy all
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This doesn't just apply to renters but also movers. The public are very quick to speak to friends or take social media advice and can often get misled. I had an enquiry this week where a friend had told the customer they would need the same 3yrs income history as they were self employed. With further questioning I established they were under the CIS scheme which rendered them as 'employed' in a number of lenders' eyes. Customers really need to speak to the experts and just ensure they don't get the wrong guidance.
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The biggest challenge for most renters will be saving the deposit without inheritance or help from the bank of mum and dad, saving a deposit whilst also paying out higher and higher rents and bills can be almost impossible.
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There are all sorts of things putting people off buying at the moment. The higher rates are a major factor, but the economy and house price reductions are not helping. Many are waiting until next year and hoping the market gets better and the economy is more stable.
Many renters want to get on the property ladder and can borrow enough to get a mortgage, especially with products like Skipton's 100% mortgage and joint borrower sole proprietor mortgages enabling parents to help out using their incomes.
Many renters want to get on the property ladder and can borrow enough to get a mortgage, especially with products like Skipton's 100% mortgage and joint borrower sole proprietor mortgages enabling parents to help out using their incomes.
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Renters generally know they can buy but sometimes I find that they come with the illusion that they cannot get a mortgage, perhaps due to the size of the deposit needed, their employment status or some other reason. Some simply don't know how to go about obtaining one. Most renters would be first-time buyers so it's no surprise they have lots of doubt swirling around. The best way I find to overcome these doubts is to simply ask what it is they want and lay out the options for them in a clear way they are comfortable understanding. Fully explaining all options available in a very short space of time is probably the most tricky hurdle to overcome, too much choice. So finding out what they want their mortgage to do is the best route. Family members with good intentions are sometimes tricky to overcome, they can often give incorrect or out of date information to them, planting the very doubt that they are stumbling on. Social proof and review sites are a great way to help build trust.
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With so many doom and gloom media stories about the difficulties in getting onto the property ladder, many renters will feel that buying is for others, not them. For advisers, undertaking basic affordability checks and taking customers through the options available to them can leave many pleasantly surprised that they can indeed get onto the ladder now! Customer confidence and trust can be gained by taking the extra care and time to properly plan an achievable budget to help them shift from the shackles of eternally lining the pockets of their landlords, to investing in their future.
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Home Owner Imposter Syndrome! The best advice to any renter who thinks home ownership is unreachable is to get initial advice from a Qualified Mortgage Advisor who will assess affordability, deposits required and budget. Having a plan will make homeownership possible. For some, it is the fear of being rejected or not being in a position right now to buy. An advisor's job is to help remove this fair and address any questions no matter how small.
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A big issue is people reading things online or speaking to their friend in the pub who knows nothing about mortgages and property before seeking advice from a professional.
Some people still think you can't get a mortgage if you're self employed and some are shocked to find that you don't stay with the same deal for a full 40 year mortgage.
There are a lot of myths about buying which have to be overcome in the initial conversation with a client and this comes from explaining to them the exact process and what they need in that first meeting
Some people still think you can't get a mortgage if you're self employed and some are shocked to find that you don't stay with the same deal for a full 40 year mortgage.
There are a lot of myths about buying which have to be overcome in the initial conversation with a client and this comes from explaining to them the exact process and what they need in that first meeting
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It is not just renters worried about not being able to buy, with interest rates increasing, I have had many Homemovers approach me who would like to move, however, the interest rates have been restrictive, and lenders' criteria have been restrictive.
We are hoping that lenders making their criteria less restrictive, especially self-employed and lenders having the rate war, will mean the mortgage repayments are more palatable.
It does question why lenders have waited so long this year to lower the rates, when rates increased they quoted Swap rates increasing, however, the Swap rates have remained stable yet lenders are now entering into this rate war and cutting their margins.
The market needs a period of stability, boom and bust has been proved many times it does not work long term.
Stability of interest rates, stability of house prices, with that we would hope Confidence will follow.
We are hoping that lenders making their criteria less restrictive, especially self-employed and lenders having the rate war, will mean the mortgage repayments are more palatable.
It does question why lenders have waited so long this year to lower the rates, when rates increased they quoted Swap rates increasing, however, the Swap rates have remained stable yet lenders are now entering into this rate war and cutting their margins.
The market needs a period of stability, boom and bust has been proved many times it does not work long term.
Stability of interest rates, stability of house prices, with that we would hope Confidence will follow.
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The first rule of buying a property is there is no perfect time to buy a property.
"I'll wait until property prices fall" but by how much and what are the costs of waiting in additional rent and what happens if interest rates increase whilst you wait for a fall that may never come? The same with those waiting for interest rates to fall, waiting can have a cost in terms of rent or increases in the price of property as lower interest rates encourage more buyers.
There is an ever-increasing number of schemes to help those looking to buy, such as 100% mortgages and shared ownership, so the key is to get in front of a good mortgage broker and chat through the options open to you. You may not walk away from that meeting with the ability to go and buy a property there and then, but you will walk away with the knowledge of what you need to do to get mortgage ready and what the costs are you need to be planning and budgeting for.
"I'll wait until property prices fall" but by how much and what are the costs of waiting in additional rent and what happens if interest rates increase whilst you wait for a fall that may never come? The same with those waiting for interest rates to fall, waiting can have a cost in terms of rent or increases in the price of property as lower interest rates encourage more buyers.
There is an ever-increasing number of schemes to help those looking to buy, such as 100% mortgages and shared ownership, so the key is to get in front of a good mortgage broker and chat through the options open to you. You may not walk away from that meeting with the ability to go and buy a property there and then, but you will walk away with the knowledge of what you need to do to get mortgage ready and what the costs are you need to be planning and budgeting for.
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I think as a rule people generally assume their situation is worse than it actually is. For example, how many people who are struggling to save a deposit are even aware that Santander allow a personal loan as deposit? Quite frankly hell well freeze over before the regulator, government or industry bodies educate people in some sort of joined up way. That leaves a huge void filled by the likes of Martin Lewis and social media savvy brokers to fill.
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A lot of renters believe that a mortgage is out of reach now, but can you blame them when they are surrounded by doom and gloom media stories about how terrible everything is in the housing market on a daily basis? The reality is for many a mortgage is very much possible and affordable and every Mortgage Adviser worth their salt will be putting an arm around their clients and providing reassurance and guidance on how to make it happen.
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I agree that many people feel that they cannot get a mortgage. Maybe they have been to their own bank and been declined. Or maybe they have a misconception about their circumstances. I always tell clients there is no such thing as a no - the worst case scenario is that i will tell a client if you go away and do X Y and Z, and then come back in a certain amount of time, then we will be able to help. Most clients are very happy with this as it gives them a realistic plan of action so they can get a mortgage in future.