Overcoming Objections and Closing the Sale

Mastering objection handling is the definitive difference between an order-taker and a top-producing Mortgage Loan Officer (MLO). For credit unions, overcoming objections means preventing leads from walking out the door and significantly increasing loan pull-through rates.  Why is it that some MLOs convert a significant number of leads when others have a lower conversion ratio.  How much revenue is your credit union losing as a result of true sales minded individuals versus “order takers”?

Over the years, I have done several presentations on overcoming objections and closing the sale.   The ultimate goal is to thoroughly educate the members on every step of the process.   For this to happen, you need to know your product AND believe in your product.  If you do not believe in your product, your member will sense that.  By doing this, you will build trust.   Members who trust their MLOs are less likely to shop at other lenders

Specific strategies to overcome the most common mortgage objections include:

1. “Your rate is too high”

• Rebuttal: “Based on what?” Uncover where they received that rate and compare the overall cost—points, fees, and service.
• Action: Shift the conversation from the interest rate to the total monthly payment and long-term financial value, rather than trying to justify a rate strictly by the numbers.

2. “My realtor wants me to use their lender”

• Rebuttal: “I completely understand why they recommend someone they trust! At the same time, this is your home and your financial future. Would you be open to a second option that might save you money?”
• Action: Rely on your credit union’s personalized service to demonstrate local expertise and trust.

3. “I’m waiting for home prices to drop” or “We don’t have the money to buy now”

• Rebuttal: “Timing the market perfectly is nearly impossible. While prices might fluctuate, historically, real estate builds equity. Let’s look at what you can afford right now to start building your own wealth.”
• Action: Discuss how the credit union handles down payment assistance or unique portfolio loans.

4. “I’ve heard credit unions can’t close on time”

• Rebuttal: “That’s a common misconception, but we process and underwrite our loans locally. Let’s look at our average closing time, they are likely faster than the industry standard.”
• Action: Educate the member on the credit union’s internal, in-house processing advantage.

5. “I’m waiting for the rates to drop.

• Rebuttal: “That’s something we hear a lot. When rates drop, everyone rushes to buy. You’ll face bidding wars and lose your negotiating power. Right now, you can potentially negotiate a great price and even get the seller to cover closing costs.”  Or “Marry the house.  Date the rate.  Secure the home you love today without competing with dozens of other buyers. If rates drop in the future, you can always refinance your loan to lower your monthly payment.”  “While you wait for a slightly lower rate, the price of the home you want could appreciate significantly. The money you save at a lower rate could be wiped out by paying a higher purchase price later.”
• Action: Educate the member on the historical rate trends and the effect of the lower rates on home prices.

The Formula for Consistent Closings

Top-producing MLOs close more loans with the same number of leads because they focus on a few key steps:

• Dig to the Root Cause: 99% of the time, objections like “I need to think about it” are rooted in fear or confusion, not a lack of interest.
• Pre-empt Objections: The easiest way to overcome an objection is to cover common concerns before they are ever voiced, typically through an upfront, educational presentation.
• Avoid Closed-Ended Questions: Ask open-ended questions and practice active listening to ensure the member feels heard and is guiding the conversation themselves.
• Provide Choices: Give members choices that empower them to make an educated decision rather than forcing a one-size-fits-all product.

Objections are not new.  They have been around since the beginning of time.  I have a book called: “The Fundamentals Salesmanship” written by Norris A. Briscoe which was written over a hundred years ago in 1916.  In his book, he states that Meeting Objections is a Necessity.  It is basic human nature for a customer to raise objections of some kind in the course of buying.  A sale is rarely made, unless it is merely the filling of an order, in which there are not several objections offered bn which there are not several objections offered by the customer.

The key is overcoming objections to close the sale.  There are several podcasts, articles, books and speakers to address this issue.

The information reported in this document, financial and otherwise, should not be construed as either legal or investment advice, nor does it represent the views of ACUMA, its Board of Directors, its staff or its members. The author presents information current at the time of publication and is designed to educate ACUMA members and others interested in the credit union mortgage lending industry.