Home Loans: How do companies find responsible borrowers?

By | November 2, 2009

A lot of homeowners have found themselves in really bad trouble by taking out excessive home loans in the United States. And this is part of the problem which led up to the financial crisis. Why? Because lenders forgot the basic principals of lending when they could write off risky loans by passing them off as investment grade materials on the market.

However, the one aspect of this story that has been overlooked is that the homeowners themselves were the ones who shared in the party. They were the ones who signed the papers in the first place, then took out excessive loans based on the premise that the party would continue for the ‘foreseeable future’.

As we are all aware, that did not happen. So let’s suppose that you are a responsible lender. What can you do to educate, inform and manage homeowners who want to borrow home loans sensibly? I’ve got three practical ways that GetSmart helps to homeowners and future homeowners.

getsmart front page

Get out your calculators!

First, prospective clients need calculators that can help them work out the details of the loans they are talking about. And, clients need two different kinds of calculators: Type 1 that is a simple calculator; Type 2 offers additional options, including variable APR, insurance, taxes, etc.

loan resources

It’s difficult to imagine a financial site without at least Type 1 calculators, these days. But type 2 calculators help customers make much clearer calculations that include more variables than the back of the envelope type calculators you’d typically find.

Credit Report

While US customers are entitled to a free credit check, providing potential customers with a credit checking and monitoring service should be a good move because customers can first check if they have any outstanding credit issues that might affect the pricing of their loan or mortgage.

Though this is a monthly subscription of $14.95, it might offer some peace of mind to customers who are worried about their credit history, those who are victims of ID theft, and those looking to improve their credit scores. Be aware, though they offer a free report, it’s free because it’s an introductory offer, and the subsequent months will generate a charge of $14.95.

Resources Center

Educating your customers in your products is absolutely essential. Why? Because better informed customers will be able to take advantage of the products and services you offer. This means not only will you generate more money as a business, but your customers will be better placed to evaluate your selling points, and to discover why they should do business with you.

In GetSmart’s case, there is a plethora of articles on the site, all neatly organised. The articles are well laid out, and they examine a range of issues from Piggyback Loans, Lock-ins, ARMs, Discounting, etc. In addition, the articles seem to be unique and well-written. They do not appear to be articles taken from every day article sites.

piggy back loans getsmart

What is most interesting though, most pages on the site offer a reasonable number of links to other articles, a few additional resources and links, and a call to action. In fact, they try four different ways to hook potential customers. Let’s hope that they plan to work their mailing lists effectively with all the traffic they are likely to get.

Data Feeds

The only downside is that you don’t get any ‘real’ information to play with, as you almost certainly need to submit an application to get any hard statistics on your loan. It’s also difficult to find a list of actual rate offers anywhere on the site, unlike some financial sites. That would be my one suggestion: get a data feed that can pull actual data to give visitors some feel of what is available.

Nicely Done

Overall, this site is nicely laid out, has the feel of an authentic loan retailer, and the server is responsive to page requests. In addition, I haven’t been able to bring up a link that doesn’t work; unlike some other financial sites I’ve reviewed. They do offer other credit repair services, identity protection, insurance products, and much more. So it’s certainly worth checking out.