With New Year's resolutions just behind us and the tax filing season just ahead, this is the perfect time of year to aggressively market home loans. Yet many credit unions just don't do it.
Why is this the perfect time? Well, this is the one time of year that everyone is thinking about money (or, more specifically, taxes). And nothing affects taxes (in a positive way!) as quietly, as painlessly, and as easily as homeownership.
Take renters, for example. I don't buy the idea that some people can't afford a home. With today's mortgage programs, everyone really can become a homeowner. Your credit union should be going above and beyond to offer every mortgage program available; if the risk is too high, partner with someone. But it's still true that some of your members don't have the motivation, think they can't save, or don't realize that they already have everything they need to make it happen.
What A Little Explaining Can Do
Many of your renting members are getting a tax rebate. And what will they do with that money? They're going to spend it. And quickly.
But what if you explained to your members that the money they're getting from the IRS is not really a gift, but their money in the first place? What if you helped them understand that they were forced to save it throughout the year? Well, you've now accomplished several things:
You've proved that they can save. Like it or not, they just did. Maybe they didn't want to and wouldn't have otherwise. But because a small portion of their paycheck WAS put aside each month, they did it. Now they can automate their savings in addition to overpaying on taxes and begin saving for a downpayment on a home.
You've shown them that their money is worth saving. Do they really want to take the hard-earned money they've saved and blow it on a few trinkets that'll be gone before the week is out? It's easy to spend someone else's money-especially the IRS'. But when they realize that the money belongs to them because they actually earned it, they might not want to part with it so quickly.
You've demonstrated that it's easy to use that money toward purchasing a home. With all the low down-payment programs out there, and all the seller-assisted closing costs that are allowed, it may not take much more than a tax refund to come up with the down payment and closing costs for a new home.
And, most of all, you've shown them that their goals really are within reach. Now that they have a nice chunk of change in hand, your members will be more likely to add to it. When the goal begins to feel tangible, they'll find ways to contribute to their home buying account to make it happen quickly.
Tax time, therefore, is not just a good time to improve your CU's image by helping members file their tax returns; it's also a great time to turn some of your members into first time homebuyers and increase loan volume at the same time.
Also, remember those New Year's resolutions? Have your members renew their vows to make 2005 the year they become homeowners. Thus between New Year's and April, everything points to one attainable goal: Homeownership!
What about the members who already own homes? This is a great time to reach them, too. A refinance might be in order. A home equity loan can help, too. And here's another thing: Tax season is the perfect time to get into the investment business. Show them how owning an investment property will positively affect their taxes. Educate them on the benefits of owning a second home. And then take their applications.
What You Can Do
So here's what you can do to aggressively market home loans to everyone at your credit union:
* Make sure you really offer all the programs. Ninety-seven percent LTV isn't the best that's out there. Can you do 100% financing? What about interest only? Forty-year loans? Can you finance vacation homes? Investment properties? The worst thing is when a credit union can't do a loan that your member can get at the bank down the street. Make it happen.
* Publish informative articles on the relationship between banks and credit unions.
* Offer an incentive to members who deposit their tax rebate checks in an account at the credit union. It can be anything from a better interest rate to a vacation giveaway package. (These are not expensive, and give members the feeling that they really got something from their tax rebate that they can use now.)
* Market across all channels. In the lobby, through voice messages while members are on hold, in the CU's newsletter, on the website, etc. Anything you can do to let members know you can help them become a homeowner or purchase an investment property is great.
Many of your members are not aware of the extensive benefits of homeownership. Educating them on the advantages of owning a primary residence, as well as investment properties, is the highest form of marketing and a great way to achieve member loyalty.
A former employee of the Texas Credit Union League, Ms. Darden currently assists credit unions as Regional Sales Manager at CU Members Mortgage. Ms. Darden can be reached at homerun
