Mortgage lead scoring helps agents and lenders identify and focus buying activity on high-quality mortgages. This process identifies potential borrowers who may be eligible for a mortgage, based on factors such as income, debt-to-income ratios, borrower assets, and credit score. When an agent or lender identifies a high-quality mortgage prospect, they can invest more time and resources in assessing the loan. This increased scrutiny often results in a better mortgage deal for the borrower.
What is Mortgage Lead Scoring?
Mortgage lead scoring is the process of evaluating potential mortgage leads to determine their likelihood of becoming a customer. This is done by assigning points to various factors, such as credit score, income, and debt-to-income ratio. The higher the lead’s score, the more likely it is that your lead will become a customer.
Mortgage lead scoring is used to prioritize leads and focus marketing efforts on those most likely to result in a sale. It also helps lenders weed out unqualified leads and save money on marketing expenses.
There are a number of different scoring models, each with its own strengths and weaknesses. It's important to choose one that matches your business needs and goals.
How Does Mortgage Lead Scoring Work?
Mortgage lead scoring allows lenders to quickly and easily determine which leads are worth pursuing and which ones can be ignored or saved for following up with later. This system helps lenders focus their time and energy on the most qualified borrowers, which leads to fewer rejected applications and faster approvals.
Lead scoring is also beneficial to borrowers. It allows them to see where they stand in terms of qualification and gives them an idea of what they need to do in order to improve their score. Borrowers who are aware of their score can take steps to improve it, such as paying off debt or increasing their credit score.
Top 3 Benefits of Mortgage Lead Scoring:
While mortgage lead scoring offers many benefits, these are the top three:
- Reduces cost of customer acquisition
- Improves efficiency
- Increases lead conversion
Now that you understand the top three benefits, let's break them down further so you can see how mortgage lead scoring can work in your favor.
Reduce Cost of Customer Acquisition
When a lead comes through, a lot of time and energy goes into converting them into a customer. By using mortgage lead scoring, you can rank leads according to their likelihood of closing. Leads with a high score are more likely to close, so they are given a higher priority than leads with a low score.
The advantage of using mortgage lead scoring is that it allows lenders to focus their resources on the most promising leads. This reduces the cost of customer acquisition, because lenders don't have to spend excess time and money on leads that are unlikely to close.
Mortgage lead scoring also makes it easier to identify which marketing channels generate the most qualified leads. This allows lenders to allocate their resources more effectively and improve their return on investment.
For example, if you're buying ads on Google and on Facebook, but only the leads trickling in from Google are scoring high, you might want to decrease the ad spend on Facebook and double down on Google. By allocating funds in the right places, you're more likely to see a return on your investment.
Improves Efficiency
Because scoring is intended to rank leads according to their likelihood of closing, the most qualified leads spring to the top of the list. This allows brokers to focus their time and energy on the most promising prospects making for a more efficient strategy that looks like this:
- Brokers quickly identify high-quality leads
- Leads are automatically prioritized, so brokers don’t have to spend time sorting through or excessively corresponding with them
- Problems are identified early on in the process, so they can be corrected before too much time has passed
- Qualified leads are nurtured
- More properties are closed and more mortgages approved.
Overall, mortgage lead scoring is an effective way for brokers to streamline their operations and save time.
Increases Lead Conversion
Simply put, you can't convert a bad lead. Why? Because if someone is never going to be approved for a mortgage, you won't be able to close the deal. Unfortunately, in this numbers game, if you're betting on a poor prospect, everybody loses.
- You get the hopes up of the prospect, only to deflate them in the end
- You waste your and their time
- You miss out on opportunities to engage with leads that will convert
By scoring your mortgage leads, you have a chance to increase the number of mortgages that are approved. This instantly boosts your conversion rates.
Where To Go From Here - Conclusion and Next Steps
In conclusion, mortgage lead scoring can be an extremely valuable tool for businesses looking to improve the efficiency and effectiveness of their customer acquisition process. By reducing the cost of customer acquisition and increasing lead conversion, mortgage lead scoring can help businesses achieve their desired outcomes while improving overall profitability and boosting their bottom line. If you're looking to improve your mortgage business, consider implementing a lead scoring system.
When you're ready to start, we recommend using Agent Legend. Our software helps you make quick work of the mortgage lead scoring rubric creation and the implementation of it once it's developed. Learn more about what Agent Legend can do for you and get started free today!
