Basic Business/Marketing Plan Outline For A Mortgage Broker

Situational Analysis

Strengths-Mortgage banking can remain profitable at all the times. ROI is very high for these companies and generation income is easy. Large profits are made through the closing fees.

Weaknesses-The revenues are mortgage companies have close correlation with economy. Rising interest rates can severely impact the mortgage business.

Opportunities-A business must be able to obtain warehouse line of credit. The mortgage company can have additional firms for generating passive income.

Threats-The rules and regulations are changing and the potential threat faced is with the credit market (Gumbau-Brisa & Mann, 2009).

Political- Political factors include taxation policy, environmental law, labor law and trade restrictions.

Economic-Economic factors include economic growth, exchange rates and inflation rates. These have the major impact on how the business operates.

Social-Social factors include age growth, population growth rate and cultural aspects affect the demand for a company’s products and services.

Technological-Technological factors include Research and development activity, rate of technology change. These factors determine barriers to entry. 

(a) Demand for service?	Very competitive in nature
(b) Direct and indirect competitors?	Mortgage companies, Refinancing companies and government.
(c) Strengths and weaknesses of competitors?	Analysis of macro and micro environments for the organization is strength, economy recession and falling interest rates is its weakness.
(d) What markets are your competitors targeting?	The social, technological, environmental markets are being targeted.
(e) An analysis of market shares:	The Five Forces model shape strategy and competitive forces.
(f) Similarities between your business and competitors:	Matching of competitive rates to earn the profitability.
(g) A general analysis of the competitive marketplace in which you operate:	The PESTLE analysis can have a direct financial and strategic impact over the profitability levels of the business.

Market Analysis  

(a) Market growth rates?	Market Segmentation will help segmental loan growth.
(b) Market expansion opportunities?	Cold calling leads
(c) Total market size?	Loan operations include more than 76 percent of total customers
(d) Growing or declining marketplace?	Lenders and agents can work together for growing marketplaces.

 Marketing Goals

(a) What percentage increase in conversion from enquiry to settlement do you want to achieve?	It is dependent on the prospects and additional leads and conversional rates. It may vary from 40 to 55 percent.
(b) Where would you like your business to be in 12 months’ time?	A stabilized business earning profit.
(c) What growth in client numbers do you want to achieve?	20 to 25 percent
(d) What percentage increase do you want in sales?	60 to 65 percent
(e) What growth do you want in profitability?	40 percent growth in profitability
(f) What growth do you want in staff numbers?	2 more employees
(g) What new services do you want to offer?	Mortgage Loan portfolio and EYC analytics
(h) How many new distribution channels do you want to establish?	Two new distribution channels depending on the profitability
(i) What percentage increase in new enquiries do you want to achieve?	Through cold calling enquires can be increased up to 30 percent.
(j) What percentage increase in repeat business do you want to achieve?	An 100 percent increase in repeat business in necessary.

  Marketing Strategy

1. Market Penetration-This results into fierce competition from national banks.
2. Market Development-The market development is a secondary market where mortgage and other financial funds are sold.
3. Product Development-The combinations of loan, collateral and borrower forms the financial product.
4. Diversification-Investor can manage risk by diversifying the risk into different asset categories.
5. Retrenchment-Retrenchment cover must be provided in the financial loan book(Chen & Yang, 2018). 

Few other Strategies-

1. Niche Marketing Strategies-Developing a niche marketing strategy for a new mortgage market segment can be profitable.
2. New Product Opportunities-The value propositions are known as the market options provided to the lenders.
3. Matching services offered to chosen market segments-New variety of financial products launched into markets.
4. Customer Acquisition via Customer Retention-Substantial interest rates can gain customer acquisition and repeat customers.

Who is your ideal client?	Financial Planners and solicitors
(b) How well do you know and understand your chosen target markets?	Selected competitive forces can provide strong growth.
(c) How well do you understand their lending needs?	These are repeated customers and market can gain good market value
(d) Are there ways to segment your market so you can offer highly specialised products to specific groups reflecting their individual needs?	Different categories of financial products can be offered like insurance products and financial mortgage products.

“Branding Products in the Mortgage Industry” requires understanding the perception of consumers and controlling the direct competitors in market place.

7.1 Product Strategy
The Company will offer commercial mortgages, personal loans, residential mortgages and leases and other products. The target segment is financial institutions and solicitors and offered at a lending rate which is lower than the markets. The pricing implementation is done by the lender panel.

The best mortgage marketing strategies are used which cater to the financial service institutions. For example-Cross-selling of products.

The pricing strategy adopted can be enumerated as follows-

• Do you charge brokerage fees, receive commissions or a combination?

Depending on the daily shifts in mortgage markets, the company charges brokerage fees, receives commissions.

• What is your average lender commission rate (upfront and trail) and average brokerage fee?

All are at the market prices. An understanding of the mechanics of pricing mortgages needs to be developed.

• Do you receive any volume bonuses from your aggregator or franchisor?

The expectations of receiving bonuses can change continuously and largely dependent on the market interest rates.

• Do possible biases exist in relation to differing commissions?

A change in the expectations compared with face value of market share price is dependent on numerous factors.

• Do you pay referral fees for introductions from strategic alliance partners?

Yes, referral fees are paid for introductions from strategic alliance partners.

(f) What is the average size of mortgages in your geographic location?

Security prices are combined with the loan to value rations and average size of mortgage is produced, dependent on different geographic locations.

 (a) You should describe how your service is delivered to your target markets.  

The service is delivered through various distribution channels like print ads, direct mails and others.

SWOT Analysis

(b) Explain the distribution methods you are employing and justify your choices.

The company size is not too big. The company needs to create a brand and special promotional strategies to create a market value.

(c) Do you have an internet presence?

Yes, without having the internet presence the company cannot start its operations.

(d) Do you have mobile lenders with the ability to function efficiently in client’s homes?

Lenders and loan officers need the best marketing strategy.

(e) Do you have public offices with private interview rooms?

Mortgage content marketing strategy is possible through public offices.

• Are there any other specific distribution channels that would be appropriate for your particular business?  For example, if you target high level managers from a few key companies perhaps you could hire an interview room within their building for a day each week.

Mortgage marketing strategy uses bulk mail strategies for targeting the particular business.

• How do your distribution channels fit into your overall marketing strategy?

Mortgage marketing strategy is focused about the complete structure of distribution channels rather than its financial rates.

People purchase home at their own convenience levels and financial planners adopt various marketing strategies like news latters, direct mail letters and advertising to create a strong market presence.

 (a) What training needs to be undertaken to ensure your staff back-up your marketing messages?

Mortgage underwriter training and current market analysis is required

(b) How will you communicate new marketing initiatives with your staff?

Diagnosing the training needs can provide insight into mortgage industry.

(c) How will you generate marketing ideas from your staff? Remember the most important people in your marketing equation are your staff and clients – you need to consider both.

The regulatory climate seems to be evolving and documentation of mortgage loan servicing is essential.

 (a) How will you monitor the changing needs and preferences of your clients?

Analysis of consumers and evaluation of interest rates and sub-prime rates can be done.

(b) What methods will you employ to gain the insights you require?

Market factors have a major significance and help in gaining insights on the consumers perspective.

(c) Who will be responsible for implementing the research findings?

Financial planners and staff members are responsible for implementing research findings.

(d) How will staff be encouraged to gain ongoing client insights? And how will they be rewarded?

Research reveals attitude and perception towards home ownership and staff can be awarded through the policies and award regulations decided by the company.

(e) Will you use an external research company or consultant to assist in the design and delivery of research?

Financial intermediaries can be used as external research company for assisting in design and delivery of research.

(a) How will you monitor trends in the economy?  For example property sales, interest rates, lending volumes, consumer trends, etc.

Household finances, mortgage rates, lending and interest rates are required to be monitored on a daily basis through regular assessment and evaluation.

(b) Are there any specific areas you need to monitor, because of your marketing strategy?  For example, if you target non-conforming borrowers you would be interested in levels of financial hardship.

Global banking methods can be adopted for reaching customer communities.

(c) How will you access industry trends?  For example memberships of industry associations, aggregator’s newsletters, industry journals, networks and government departments.

Access to online mortgage brokers information is provided to all the companies. 

 (a) Why borrowers use your mortgage broking service?

The borrowers use mortgage borrowing service as it is easily available and have sublime interest rates.

(b) What the perceived benefits of your service are?

The perceived benefits are easy to avail mortgage loans. 

(c) What are your client’s expectations and does your service meet their standards?

Customer referrals created by customers is of great importance and these act as an effective tool.

(d) How do you gain their loyalty?

Learning the best marketing tactic and regular holding meetings can gain loyalty

(e) Why do your clients use your services over other mortgage brokers?

The lower interest rates can often repeat customers.

(f) What type of loan features most appeal to your prospects?

Lower lending rates and widely available information appeal to the prospects.

• How are choices made when deciding upon a mortgage broking service?

Depending on the economy and lending rates and ease of availability are few choices can be made through mortgage broking service.

• Are borrowers typically presold on a brand or are they more impulsive?

Depending on the needs and financial information provided, an financial borrower can be impulsive or brand conscious.

• What activities do your prospects enjoy in their leisure time?

Access to the information bulletin.

Loan officers need to plan their marketing budget by identification of target market and invest in developing personas.

Medium size marketing companies invest in marketing as investing is low. This can have a positive impact on the target market.

Strategy	Actions	Who	When
Digital Marketing strategy	Bulk mail campaigns and installation of appropriate software and awareness of online marketing strategies	Mortgage companies	This strategy is ongoing.

References

Chen, K., & Yang, J. (2018). Housing Price Dynamics, Mortgage Credit and Reverse Mortgage Demand: Theory and Empirical Evidence. Real Estate Economics.

Gumbau-Brisa, F., & Mann, C. (2009). Reviving Mortgage Securitization: Lessons from the Brady Plan and Duration Analysis. SSRN Electronic Journal.