Don’t let rate site popularity scare you

Don’t let rate site popularity scare you

A new CMP article is being called the most persuasive argument for why rate sites are increasingly important to brokers, but try telling brokers that.

“Rates sites attract borrowers who are rate shoppers,” said Jackson Middleton, broker at Highland Mortgage Partners. “These are consumers who will typically switch to another broker over a minor percentage difference in interest rates.”

Simply put, that’s just not the ideal client for brokers, he said.

The comments come on the heels of a new online survey suggesting more consumers are turning to rate sites, drawn in part by the anonymity of shopping online. The remarks may also disappoint the rate site execs contributing to an article in the September issue of CMP. They make a strong case for why they should be perceived as friend and not foe by all brokers.

Still, new research may be on their side. recently said visits to its website reached the one million mark and that applications to purchase or refinance homes in August through quadrupled compared to the same period last year.

In Canada, no less than the nation’s largest newspaper publisher, Toronto Star launched its own mortgage rate comparison site, ComparaSave.

More established local rate sites are meanwhile becoming larger. For instance, RateSupermarket has added a slate of bank account and investment comparisons to its existing mortgage-focused platform.

But mortgage professionals, said Middleton, are better off focusing on “the quality rather than quantity of leads.”

“For example, I only do business by referrals because these borrowers know me or know somebody I know,” he said. “It means these people are serious about the process. You don’t make the biggest, most important purchase of your life with somebody you just found on the Internet.”

  • Paolo Di Petta | 2012-09-22 5:59:30 AM
    Jackson hit the nail on the head - if people are going to choose you for rate, they'll leave you for rate.

    This goes back to another article posted here last week about product diversity. If someone has perfect credit and qualifies at an "A" institution, the difference in rate is often negligible. Sure we're competitive, but our real value is in our service, expertise, our ability to educate and our relationship with the borrower.

    Most of the mortgages I work on aren't with "A" clients. I prefer to help the people who need help getting out of a rough situation. Often times, they just didn't know better - basic financial literacy is missing in the curriculum at most high schools. There's a reason that our household debt ratio has hit it's highest level ever at ~154%. Credit is like rope, and predatory institutions know - if you give people enough, eventually they'll hang themselves.

    As a mortgage professional, we offer more than rate. We offer a service and a way out. I've always said that I'm not in the business of getting people mortgages - I'm in the business of getting rid of people's mortgages.

    But I digress, people playing the rate game don't bother me - every industry has it's "Tim Horton's" and it's "Starbucks". If people want to do rate-based volume, more power to them - I'll continue to offer a more careful, personalized service.
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  • Ron Butler 2012-09-23 1:20:23 AM
    We use the rate comparison sites and without question the type of clients who use these sites may not suit every broker.

    I will tell you this; many applicants on these sites are among the highest quality applicants in this country and think it is important for brokers to realize that if we think as a group we need to only work with people who need "help" we are limiting our market in a big way.

    While I know there are many brokers who specialize in working with high-end clients I think sometimes some brokers believe our natural clientele are unsophiscated. I want our industry to market to everyone just as the banks do.

    Rate comparison sites attract a segment of mortgage buyers we should seek and not avoid.
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