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The Era of Customized Mortgages

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Customized mortgages have always been available from small mortgage firms, but today their popularity is growing in a world full of big belly banks. Organizations have realized that every service is now made customer-centric, and mortgaging is no exception.

The needs and objectives of customers vary and so should mortgage plans. When customers opt for a loan or pursue a refinance, lenders can approach them with tailored mortgages that sync with their needs and capacities.

Since the market crash last decade, customers are very skeptical about availing loans. Consumers have started preferring short-tenure mortgages to be able to close loans quicker, and enjoy smaller interest rates at the same time. Although the borrowers have to pay bigger installments, shorter tenures help customers save money on the whole loan. They can invest it somewhere lucrative. But there is also a section of consumers who don’t want mortgage liability to be a burden on their day-to-day lives. They settle with longer tenures and slightly higher interest rates.

Why should lenders offer customized mortgages?

Intense competition and stringent regulatory criteria are stifling the lending market. To beat competition and attract customers, it is vital for organizations to understand and cater to specific needs of prospective borrowers. Besides that, in this fast-paced era, individuals are looking for customized services to suit their convenience.

Individualized or tailored mortgages are mutually beneficial. They drive mortgaging customers to choose lenders who vouch for convenience, rather than the ones who offer rigid mortgages. And not only does customizing increase revenues; it mitigates the probability defaults as well.

Lenders are open to customers’ demands, allowing them to choose their mortgage tenures and associated interest rates, and a suitable payoff date. The initiative has encouraged customers to stick to their mortgage schedules.

Often, customers are not sure about the mortgage or refinance plan that is suitable for them. As a result, they simply call their visits off! However, lenders should take the first step and approach consumers by offering them customized mortgage solutions. Besides easing their plight, the right approach will make your offer difficult to resist.

Customized mortgages open up a whole world of opportunities for lenders. That said, they need to be equipped with appropriate technology and analytics that project customer needs, interests, behaviors, and emotional drivers. That will help create tailored mortgages and mortgage services.

Lenders should customize mortgages based on customer segments. The segmenting largely depends on mortgage objectives (home loans, housing refinance, personal credit and more) and financial capability (credit scores and gross incomes). Lenders can provide individualized solutions like joint loans (for couples, etc.) and low-interest mortgages or bridge loans. They help consumers make payments without any glitches.

As long as lenders and financial institutions remain flexible and treat consumers and their requirements differently, the mortgage ecosystem will be friendly and favorable to both sides.

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