The Mortgage Annual Review: The Member Retention Strategy Credit Unions Are Missing

Closing on a mortgage isn’t the end of a transaction. For credit unions, it’s the beginning of a relationship with a member.

That’s why an annual mortgage review is so important.

“An annual review gives us the opportunity to reconnect with a member, make sure their mortgage still fits their needs, and help them take advantage of changes that may have happened over the past year, explained Erick Padron VP Lending, Sr. Management at Tropical Financial Credit Union.

It’s key to fostering a strong relationship that lasts for years to come.

What to discuss during a mortgage review

A mortgage review is not a one-size-fits-all discussion. In fact, it’s ineffective unless it’s personalized to meet each member’s unique situation.

Ideally, credit unions would use a CRM and data analytics to track important milestones, such as loan anniversaries, and encourage members to schedule annual reviews with a mortgage loan officer.

Once the member agrees to move forward, start with the basics of the mortgage: the remaining balance, loan term, interest rate, and payment history. Make sure members understand each component of their mortgage and encourage them to ask questions.

Next, discuss their lifestyle and current circumstances. If anything has changed from a year ago, adjustments might be necessary. For example, if their credit has improved, refinancing might make sense.

Also, dive into current market specifics that might affect them.

“In South Florida, for example, we discuss how home values have changed and whether members can use their equity for projects like home improvements, debt consolidation, or education expenses,” Padron said.

Remember that one of the greatest financial opportunities homeowners overlook after they close is the equity they’ve built.

“Not only could a homeowner use their equity to improve their home, but they may also be able to remove private mortgage insurance (PMI), which can help lower their monthly payment,” added Padron.

How annual reviews support retention and cross-selling

At the end of the day, regular reviews keep member relationships going rather than treating the mortgage as a one-time transaction.

This is particularly true when they’re paired with free mortgage seminars throughout the year that can educate both members, answer questions, and help homeowners better understand their options.

“Annual reviews allow us to identify a member’s changing financial needs and have conversations about products that may benefit them, whether that’s a home equity loan, auto loan, personal loan, or credit card,” said Padron.

More importantly, it tells members that their credit union is looking out for them and genuinely cares about their financial success. It also reduces the likelihood that they will seek advice or other financial products elsewhere.

“Annual reviews can do wonders for engagement and long-term loyalty,” added Padron.

Credit unions that realize mortgages aren’t one-and-done transactions can set themselves up for long-term success.

By making annual mortgage reviews a standard part of the member experience, they can strengthen relationships well beyond the closing table while helping members navigate their evolving financial needs.

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.