Many home lending trends from 2020 are continuing in 2021, though whether they stick around will be dependent on the economy. Here is an overview of home lending direct mail marketing strategies from the past year.
1. Rates Are Climbing
Though refinancing was all the rage when rates were at historic lows throughout the majority of 2020, they’re beginning to rise again. While rates are largely determined by the economy, this sudden change can be used as an opportunity for lenders trying to usher in refinancers who pushed it off last year. Including urgency in messaging, using graphs and charts to show rate increases, explaining why rates are rising, and emphasizing how unpredictable the market is — as NewRez and Chase did in the examples below — will give potential borrowers a newfound reminder that they need to refinance before rates go up again.
Mortgage mail volume recovered quickly after an initial fall when the pandemic began. February 2021 mail volume now exceeds February 2020 numbers. The top mailer was NewDay Financial, which led the recovery beginning in summer 2020, and continued steadily throughout the winter and into 2021. Catering to veterans, NewDay Financial’s top-mailed campaigns were all promotions for its VA Refi Benefit.
NewDay Financial also relied on numbers to encourage borrowers to refinance, saying “I urge you to activate your VA Refi Benefit now, and cut your mortgage payments an average of $3,000 a year.”
Like NewDay Financial, ClearPath Lending, which sent only direct mail, focused on mortgages for veterans, with two different options for veteran homeowners. However, its formatting and offer design took a no-thrills, plain, and straight-forward approach.
Quicken Loans’ direct mail, on the other hand, emphasized a borrower’s options, while its email was all about refinancing.
Many refinance emails encouraged homeowners to recalculate their loan, while others provided guidance and reasons to refinance in the first place.
Quicken Loans also put together an online Refinance Guide to help borrowers learn more, and encouraged those interested to call or chat with one of their “Home Loan Experts.”
While mail volume with no option to refinance has barely returned to its pre-pandemic mail volumes, offers that contain the option to refinance have been climbing compared to the pre-pandemic landscape. Refinancing was heavily pushed throughout 2020 because of falling rates brought on by COVID-19. However, as the world continues to fight COVID-19 and the economy continues to improve, interest in refinancing will dwindle, as it already has because of recently increasing rates.
Savings from refinancing were often the focal point of campaigns. SoFi, for example, used its outer envelope with “Lower your mortgage rate and save” messaging and a cartoon graph to emphasize falling rates. It also emphasized quick rate checks via its mobile app.
Lenders also utilized a variety of ways to educate potential borrowers about their refinance options, including internal experts and digital guides and checklists. Citibank encouraged borrowers to seek out its mortgage representatives and “discover the perks of your Citi relationship” to determine a refinancing option. It also offered $500 off closing costs.
Similar to Quicken Loans and Citibank, Ally emailed out a checklist to prepare borrowers for refinancing, including a refinance calculator tool. It also included cross-selling of Ally’s Online Savings Account, encouraging borrowers to use its bucket tool to save for refi closing costs.
Popular phrases on the refinancing offers included “rates are near historic lows” and “lock in a rate.” Below are just some of the campaigns that included this verbiage.
As rates continued to rise in 2021, many lenders encouraged refinancing before rates went up even more. NewRez, for example, warned potential borrowers of the volatility of the market, encouraging them to lock in their rate now, saying, “If you haven’t considered refinancing lately, this is your wake-up call.”
Similarly, Chase said, “Rates can change daily so get started soon.”
Quicken Loans also stressed the urgency of refinancing as soon as possible writing, “If you’re looking to refinance your home loan or purchase a new home, now is a great time to do so before mortgage rates tick up.”
2. Personalization is Up
With the upheaval from the pandemic and subsequent hit to the economy in 2020, many people found themselves in unfavorable financial positions. Because everyone’s situation is different, home loan offers got more personal, whether it was including names in headlines, celebrating the communities, cities, or states the recipients reside in, or providing stats on a homeowner’s home value estimate. Making offers personal and specific to each borrower to better match their experience could prove helpful in getting an application process or refinance started.
Meridian Home Mortgage made its mailings personalized by celebrating the recipient’s community. It celebrated a potential borrower’s community, reminding them of why they live there in the first place, and getting them excited to buy or refinance a home there can go a long way in rejuvenating a person’s interest in where they live. In one example, Meridian celebrated the uniqueness of Maryland, saying, “There are certain things that make Maryland special. Cracking crabs with friends and family, enjoying Ocean City in the summer, maybe catching your favorite Birds game. Wouldn’t it be awesome to enjoy more of your area by paying off your $36,000 in estimated credit card debt?”
Wells Fargo’s mortgage direct mail was informational, educational, and included links to home buying-tips, features and tools, and included a QR code for easy access.
Wells Fargo also used its direct mail to check in with Home Matters program members to ensure their mortgage was still meeting their needs and goals and explained the difference between prequalification and preapproval in an info direct mailer.
3. HELOC and HELOAN is Recovering
While mortgage mail has more than recovered, home equity lines of credit are still lagging. Current home equity providers or those outside the industry wanting to add a new product to their line can see this as an opportunity to jump in while the space is not as crowded. Top HELOC/HELOAN mailers Point Digital Finance and Third Federal Savings & Loan exited the mailing space during the early months of the pandemic in 2020, but both rejoined by the fall.
Point Digital Finance, which left the home lending direct mail space from May to August 2020, used personalization in its offers by including names in the tagline. The main emphasis of Point Digital Finance’s direct mail campaigns, however, was its lack of monthly payments. It used messaging like “pay nothing until 2050!” and “no monthly payments, forever!” as taglines.
Third Savings & Loan kept consistent from 2019 to 2020, with mailers focused on low rates. It also continued sending $100 Home Depot gift card promotions for those who open a line.
After experimenting with direct mailer formatting throughout 2019, Figure Lending also kept it consistent in 2020. It referred to itself as the “#1 non-bank HELOC lender,” and nearly all of Figure Lending’s direct mail creatives sent in the last year have the same formatting, design, call-outs and information.
Although Citizens Bank’s direct mail campaigns focused on its rate discounts, it also had a flair for personalization. At the top of nearly all its direct mail campaigns, Citizens Bank included a rate discount offer in large text, putting front and center the hard numbers behind its value proposition. It also infused personalization into its mailings, including home stats like home value appreciation, estimated home value, monthly payment, and more.
Discover re-entered the home lending email space in late 2020 after being absent for more than a year and a half, with complementary mailers focused on savings and a simple lending process. While Discover occasionally used the format previously, informational packets made up the majority of Discover’s 2020 direct mail campaigns, with emails employing a strong and forward cross-sell strategy, focusing on complimenting current customers for good credit.
COVID-19 Still Top of Mind in Home Lending Considerations
Wells Fargo included COVID-19 references in many of its customer communications. In alert emails, mortgage review reminders, and promotions for its mobile app, Wells Fargo included links to COVID-19 support. It also suspended mortgage payments during the height of COVID-19.
States Mortgage, PenFed, and Wells Fargo all referenced COVID-19 as a conversation starter for other products or features. States Mortgage explained that COVID-19 was a cause for falling rates and encouraged a refinance.
PenFed and Wells Fargo, on the other hand, both pushed for contactless and digital features.