Product over Rate?

One of the largest surprises I had when I first began doing mortgages was the concept of selling my clients the right product over the right rate. Now I guess that makes sense if your clients play the markets, or own many properties etc. But if the bulk of your clients are first time home buyers or move up buyers that are still in the process of accumulating savings then what product beats a great rate?

I mean seriously. If I can offer you a mortgage rate of 3% what mortgage product will beat that! I was told to sell the fact that they could double up on payments. Well most mortgages allow you to prepay 15% of your mortgage every year and most of my clients have no intention of using this service.

Then there was the great selling tool of a portable mortgage. Well again, most mortgages are portable and if your client is thinking about selling their home in the next couple of years then this is very important but the best rate might be the best product in this situation too. If they have a definitive plan, then placing them in a great 3 year variable at prime -0.40% (1.85%) or 4 year fixed at 3.4% might be a much better idea than a portable 5 year fixed at 3.89%. Can I hear a hallelujah? I guess what's more important here is the planning. If they really don't know when they might move then portable is the way to go but still at the best possible rate.

I guess I'm just not sold that you can sell product over rate and I don't think any of my clients are either and let's remember why we have great products at higher rates. It's all about MBS - Mortgage Backed Securities. But that's a different blog for a different day.