In the past year, Nomis has been working with mortgage lenders of all sizes and types to help them with pricing analytics and strategy, especially during the increased activity in home purchases and refinancing.

Processing the influx of applications has been every lender’s top priority to keep the business running in 2020. As we enter the new year, it is important to take the time to regroup, reassess, and recalibrate your lending and pricing strategy and align them with your goals and objectives.

In our ongoing conversations with clients, we empower mortgage lenders to think about their strategy and pricing critically in the context of the overall market, their competition, and how they manage margins. In that process, we guide them through using mortgage analytics to help them inform and set goals that are attainable and beneficial to the health of their business.

Here are short-, mid- and long-term goals that lenders should consider setting for the new year:

Short-term Goal: Understanding market dynamics and tracking how you are competing
Do you know exactly where your rates stack in the marketplace? Or how much market share do you and your competitors have in the areas where you are doing business? Many lenders set their rates arbitrarily using only reference indices (LIBOR, SOFR, Treasury) or other over-generalized indices that are not representative of the overall mortgage market. Lenders should consider the dynamic market conditions in their price-setting strategy, while also accounting for their unique capacity and other organizational constraints.

Mid-term Goal: Granular pricing to increase margins and maximize revenue opportunities
Different states have different market dynamics. The distinct levels of competitors can dictate the price sensitivity in those markets. By understanding pricing at the regional- or state-level, lenders can start to think about pricing more advantageously to take capture market arbitrage opportunities and increase margins.

Long-term Goal: Entering new markets to expand your business’s footprint
As your business grows, you might be ready to take on a market or product to continue expanding your footprint. Understanding the activity and competitors in the markets you are trying to pursue will be instrumental in your expansion strategy. Drilling down into zip-code or branch-level analytics will better prepare you for how to compete in a way where you win and build a solid foundation to gain market share.

Data, analytics, and reports are ubiquitous these days. Information overload has been and will continue to be a real challenge, especially in the highly dynamic market that is the mortgage industry. The answer lies in looking at the right information, how well you are understanding these numbers, and more importantly, how you can make it actionable.

The ability to understand more detailed analytics and make effective use out of them will be a competitive advantage for any mortgage lender that is trying to compete in today’s market. Embracing data and technology and embedding it into your operations should be a top priority for 2021 to help you achieve your goals.