Mortgage Leads Introduction
What are mortgage leads?
People in the mortgage industry will be familiar with the term. A mortgage lead is information on a person who is seeking some sort of mortgage, whether it be for a new home loan or a refinance. Mortgage brokers spend thousands of dollars on marketing through radio, television and the newspaper to get potential leads. Closing a mortgage lead can result anywhere from $800 to $8000 in commission for a mortgage broker, depending on how much the loan is for.
With more people today using the Internet than before, internet generated mortgage leads have become gold for mortgage brokers. A single mortgage lead costs between $15-$25 on average. A television or radio ad costs more than 100 times that amount to run a single ad. Thus, mortgage lead companies have sprung up to sell mortgage leads to mortgage brokers. The mortgage lead companies make their money by selling the lead, while the mortgage brokers are able to cut back on their marketing costs through traditional channels and divert their spending towards internet mortgage leads.
What about the quality of the leads?
From personal experience, the closing ratio on internet mortgage leads range from 5% to 10%. That means, if I purchased 100 leads at $25 dollars a piece for a total of $2,500, and closed just 5 leads, making $2000 per lead, I just made myself $10,000 - $2,500 = $7,500. Even new brokers can close at least 5 leads out of 100. Now, imagine if you are a great people person and can close just 10% of your leads instead of 5%. With a commission of $2,000 per lead, that would equal $20,000 - $2,500 = $17,500. Now you can see why mortgage leads are like gold to mortgage brokers. No longer do they need to focus on marketing, but can focus their attention on closing loans. This is one reason why large lending companies such as Ameriquest and Aames Home Loan purchase mortgage leads today.
Warnings about mortgage leads
A lot of people have recognize how attractive mortgage leads are to brokers and take advantage of that fact. Mortgage leads websites have sprung up faster than Michael Jackson could invite little boys to his ranch. A good amount of these mortgage leads websites aren't even functional. Their main purpose is to get the broker to enter payment information, such as their credit card information. Please read our section on the basics of mortgage leads to learn how you can prevent being taken advantage of.