Mortgage Leads 101 - Learn What Works

What Are Mortgage Leads?

Mortgage Leads are prospective home buyers that need financing. Therefore, they get in contact with mortgage brokers, loan officers, and lenders to get pre-approved. The spectrum of motivation, interest, and intent ranges from highly motivated buyers to people that are just shopping around.

Mortgage lead generation is an important topic in the industry. There are some originators that swear by 3rd party leads like Zillow or Lending Tree. While others self-generate through Facebook and Google. At the end of the day, there is no one size fits all mortgage lead gen model. However, there is a range of high-quality versus low-quality options. Furthermore, some lead gen strategies may yield short-term leads, but are not a sustainable marketing plan. In this comprehensive post, we discuss every mortgage lead gen strategy to help loan officers and mortgage brokers stay informed on what works and what does not work.

Top Mortgage Lead Generation Models

In the mortgage industry, there are two types of lead gen models: 1st party mortgage leads & 3rd party mortgage leads. A 1st party mortgage lead is a prospect that comes directly through your marketing funnel with the expectation to talk to a mortgage broker or loan officer. A great example of a 1st party lead is self-generated leads from Google, Facebook, YouTube, or any other social media channel.

A 3rd party mortgage lead is when someone falls down a marketing funnel and then that person’s information is passed to a lender. Examples of 3rd party leads are Zillow, Lending Tree, or even realtor referrals. In mortgage marketing, there is room for both 1st party and 3rd party mortgage leads. However, the quality, intent, and expectations range drastically from self-generated mortgage leads to 3rd party online leads.

More specifically, the intent behind someone searching for a mortgage broker online and someone searching for ‘homes for sale’ is huge. When a person is looking for a mortgage broker, they are usually educated on the process and understand the value of a pre-approval. With 1st party leads, the educational process is less strenuous because the prospect comes to the table with a lot of education.

On the other hand, if someone fills out a Zillow form to find a home, they are not always ready to talk to a lender. Therefore, getting a real estate lead on the phone is much more difficult than a 1st party mortgage leads. Additionally, 3rd party mortgage leads are a much harder sell for a few reasons. One, they generally don’t understand the value of a pre-approval and need to be educated on the process. Two, they are more likely to shop around for lenders or get taken by the realtor’s choice. And third, people searching for homes online can be much further out of the home buying process. Often, people scan Zillow years before they are ready to purchase a home. With that said, every lead source has pros and cons. There is no one-size-fits-all lead gen strategy. Therefore, we break down every mortgage lead gen model for brokers, loan officers, and lenders.

Zillow

Zillow is one of the most popular home search portals in the world. Due in large part to the extensive data feed, Zillow has access to home data across the United States that consumers leverage daily. When people use Zillow, they can be connected to local real estate agents and lenders as they see fit. Zillow uses its extensive home data feed to find motivated buyers. This is where the popular home portal becomes one of the most popular lead generation models for loan officers and realtors. On every home, there is a small pre-qualified button that users can click on. This link opens up a long-form survey that warms up leads for lenders.

Zillow Mortgage Leads

As a premier 3rd party lead aggregator, any realtor or lender can buy qualified leads from Zillow at a premier price. Additionally, leads are set at a market price. Therefore, the supply of leads and demand for business in each zip code determines the price. If the supply is low and demand is high, I have seen upwards of $1,200 cost per lead in certain zip codes. This poses the biggest issue with a 3rd party mortgage lead aggregator like Zillow. At the end of the day, you are not in control of lead flow. Zillow holds all the cards, and this is the case for any 3rd party lead model. However, in this case, due in large part to Zillow’s popularity, the home search giant has a huge amount of leverage on agents and brokers that are reliant on Zillow as the only source of leads. Overall, Zillow does offer high-quality leads, however, I recommend diversifying your lead sources as much as possible.

Lending Tree

Lending Tree is another popular 3rd party mortgage lead aggregator. However, Lending Tree focuses on attracting leads that are highly researched on mortgage rates, insurance premiums, credit cards, and personal finance options in general. Lending Tree poses as an unbiased marketplace where consumers can compare mortgage rates on the spot. Lending Tree’s tagline plainly states, “Shop and compare everything. Even Loans.”

The consumer behavior behind a user on Lending Tree and a user on Zillow are completely different. Therefore, you can expect lead with buying motivations centered around saving money, low rates, and shopping lenders. This mortgage lead source is a great fit if you have the lowest prices in town. However, if you have a healthy margin, leads will expose this quickly and find the cheapest option. All in all, Lending Tree is not a premier mortgage lead model. If you are going to spend upwards of $100 a lead, I would spend that money on Zillow.

Realtor Referral Mortgage Leads

Realtor referral mortgage leads are the highest quality 3rd party lead source on the market. For mortgage brokers and loan officers, this should come as no surprise. Traditionally, realtors relationships have been the go-to marketing strategy for mortgage leads. Instead of spending money on marketing systems, L.O.s and brokers spend money on a realtor, hoping they send business in return. Unfortunately, if you do not have a true realtor ally, this is not a sustainable marketing system.

If you want to grow a realtor network, start by finding a realtor you trust and create an expectation of equality. Both parties should generate similar leads a month. This requires you to spend time developing your own marketing material, instead of relying solely on an agent. By coming to the table with a ready-made marketing system, you will attract the right agent partner and your mortgage leads will explode. Like all 3rd party mortgage leads, do not rely 100% on these marketing sources. Any 3rd party marketing system is out of your control – realtor-generated leads are no different. Your agent could move, quit, or decide not to reciprocate marketing efforts. Either way, it is imperative that you self-generate business through a 1st party marketing effort.

Social Media Mortgage Leads

Social media marketing is intimidating for most loan officers and mortgage brokers. It seems like social media is a crowded space with algorithms that change every day. Plus, can you even generate quality mortgage leads through Facebook anymore? However, like most forms of marketing, social media is all about connecting good content to the right audience. It is that simple. So let’s start with the audience piece. Who are you selling to? What are their motives? And where do they live online? These are three questions you need to ask yourself before you develop a social media content strategy.

If you are selling to millennial first-time homebuyers, Instagram is a good start. If you are focused on the military, find military spouse groups on Facebook. At the end of the day, in this business, the riches are in the niches. Find people that you can relate to online and create a social media strategy that creates engaging content for them. Once you have outlined your audience, develop content just for them. Back to our previous examples, if your target audience is young FTHB, create a video series that outlines every step of the homebuying process. Not only is the content relevant, but millennials respond well to long-form videos series. From there, you can cross-post this content on your website, Facebook, IG, Linkedin, and the list goes on. By developing an audience with great content, you will generate quality mortgage leads for as long as you create videos, blogs, and social posts.

Search Engine Marketing

Mortgage leads that come from search engine marketing (Google Ads or Microsoft Ads) are the highest quality 1st party leads on the market. The intent behind a Google search is generally highly motivated and educated on the process. This leads to a high-quality prospect that is willing to jump through a few hoops for a pre-approval letter that can be used for offers. The process for search engine mortgage leads is pretty straightforward. The first step is to create a Google Ads or Microsoft Ads account and link it to your primary website. From there, you can create a search campaign that has a target location, keyword grouping, time frame, and budget. When dictating your keyword groups, do some research using the keyword planner tool. Below is a quick list of mortgage terms to get you started on the Google keyword planner tool.

Mortgage Leads

This gives advertisers insights into search volume, competitiveness, and average CPC. These insights will help you decide on the best short-tail and long-tail keywords to use in your campaign. When you have decided on a handful of keywords, you can set the cost per click you are willing to pay. If you bid too low on your keywords, you will never get traffic. However, if you bid too high, Google will overspend your budget before you can be profitable. A good rule of thumb is to start on the lower end and slowly work your keyword bid up as you see fit. At the end of the day, generating quality mortgage leads through Google Ads is dependent on a good strategy and an experienced PPC manager. There is no perfect Google Ads or Microsoft Ads strategy, however, having someone to constantly make adjustments will give your campaign the room to flourish above competitors.

Remarketing

Remarketing is a tactic that involves showing targeted ads to users that have already interacted with your brand. A great example of remarketing is showing banner ads to people that have been to your website in the last 30 days. Remarketing is a highly effective mortgage lead model because of the ability to push cold prospects down your sales funnel and turn them into hot leads. Highly effective remarketing campaigns always start with a content strategy. Create content that drives users to your website or social media page.

The content should be informative and educational. For example, write blogs or post videos about your local market. This form of content will be highly relevant to your target audience. The people that view your content will not be ready to make a purchase decision on the spot. However, they will be in the marketing of homebuying in the next few months. As your website collects this data, you can then put them on a remarketing campaign that follows them around the entire internet. As your prospects get closer to buying a home, your name will be in front of your mind. While remarketing campaigns are a long-term play, they are an essential form of marketing for brokers and loan officers that want to stop chasing low-quality leads.

What is the best mortgage lead model?

There is no perfect lead gen model. However, we have outlined the most important mortgage lead options for loan officers and mortgage brokers big and small. It is important to use a mix of everything to create a sustainable marketing system that can last. Fundamentally, to have a successful mortgage lead gen model, you need to understand the sales funnel and consumer journey. Hone in on your target audience and work them down your funnel through social media, search engine marketing, 3rd party lead sources, and remarketing. Ultimately, if you rely on multiple lead sources and continually optimize your funnel, your well will never run dry.

Henry

Henry has spent the bulk of his career working for mortgage companies and marketing agencies. He uses his experience in the martech industry to guide his strategies and insights in the mortgage and real estate world. He firmly believes that marketing success in every industry boils down to a technology-centered strategy.

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