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  • Ten Concepts You Should Know About Mortgage Cross-Selling

    September 23, 2016 | Blog
  • Cross-selling

    Selling new products to the current customers is a common practice by the banks, and the discussion has been held in different meetings. Up till now, the banks have enjoyed great success in cross-selling. The banks should remember the ultimate goal is to improve the bottom line before establishing the agenda.


    Overview of Cross-Selling

    Everyone is prone to cross-selling. Using a broad definition, it is the moment a financial institution sells a new product to you outside your request. The practice is prone to new customers. A good example is when the bank sells an existing credit card customer a mortgage. Banks have been using the tactic to expand their customer base. Every bank sets its logic on the number of relations with the customers. More relationships mean better wallet stake of the customer.

    The only aspect most banks seem to forget is that profitability of customers is very essential. Therefore selling the pursuit of selling new products to the existing customers is not the best approach.

    As a matter of fact, cross-selling comes with a lot of advantages. It significantly reduces client acquisition costs, marketing and servicing, and communication costs and thus substantially upsurges spread for banks. It is well agreed and key finding that larger the number of products held by client leads to a better possibility of retention.

    Cross-Selling in Our Daily Lives

    You’ve got a consumer who is acquiring a product, to solve her problem. You want to surge the value of the business – equally for your customer plus yourself. To do that, you have to offer an appropriate cross-sale item. Trading french fries with a sandwich is a sense.

    Also selling car wax with a new car creates sense.Selling car wax with a sandwich? You perhaps won’t have a lot of achievement with that.The difference comes in financial services since the products are more complex and consequential fine print with each offer can result in undue charges or product.

    Among the examples of financial services is the overdraft protection. This is the service extended by the banks to allow you briefly make a purchase using their credit cards regardless of insufficient funds in your account. After you are done to make a purchase, the bank draws funds from another account and covers the average.

    You might find a request from the bank to open you a new account if you do not have another. Such scenarios are tricky to handle. The reason is, you will be asked for your consent to sign or verbally to the terms and conditions. Before committing to the deal consider the following aspects.

    • Charges associated with overdraft transfers.
    • Other recurring fees.
    • Other condition binding the bank to add new products without your consent.
    • The low balance necessity for individual accounts.
    • More importantly, never engage in a verbal consent. Instead, request for the entire written terms and conditions to avoid unnecessary fees, products or both.

    Mortgage Versus Cross-Selling

    The mortgage is like a protective law to prevent you from the fate of blinded loan application. The law ensures that loan terms, the rates, line item charges and cash required to close are disclosed in details.

    However, you are still subjective to cross-selling. To enlighten mortgage cross-selling situations, read the concept discussed below.

    A primary banking individual is more likely to be sold a mortgage that a new customer. A stand-alone mortgage consumer can be sold additional bank products, such as a checking account, on the road to becoming the customer’s primary bank. Start a home-based equity line of credit (HELOC) by your mortgage. HELOCs are an appropriate way to success your home’s equity. They are indeed a second mortgage which you can put in place with zero balance. You only make disbursements if you institute a balance, and the rate can either be variable or fixed.

    Repaying Mortgage with a portion of credit card spending. Once you open a credit card, it is the responsibility of some lenders to credit you a certain percent towards repayment of your mortgage. You should always ask your loan officer to review every term and condition before agreeing.

    After choosing the best mortgage coss-sell plan for you, it is essential to inquire from the loan officer whether they get paid using no- mortgage products. By so doing you will understand whether you were benefiting, or you are benefiting them