Entering the year, many lenders find themselves in a challenging position: After a tough 2023, they can’t afford to incur costly overhead—and yet to boost profitability, they need loan volume, which requires investment in sales funnels and operational resources. This juxtaposition leaves much of the industry paralyzed, with little deliberate planning towards capturing loan volume and driving growth in 2024.
Don’t let this conundrum leave you sidelined. Rather, consider a sustainable growth strategy that scales your operations in proportion to loan volume. Here, your priority is to minimize fixed costs while building agility into your business, allowing you to grow strategically and sustainably.
“To succeed in 2024, lenders need to prepare for an uncertain year of growth and non-growth periods,” says Alan Parris, Managing Director of Maxwell Private Label Origination. “They should be asking themselves: How can I capitalize in both environments quickly while protecting my bottom line? For many, the solution is a variable cost model achieved through outsourced services.”
Growth through a variable cost model
By moving more of your expenses to a variable cost structure, you can have the best of both worlds: the ability to capture borrower business without the risk of overextending yourself. You’ll gain the agility you need to grow in lock step with the market, only incurring costs when demand arises—and in 2024’s uncertain market, that flexibility will be vital.
“This year’s market may not bring the duration or size of past refinance waves that many lenders are accustomed to during previous market recovery,” Robert comments. “In the current economic climate, rates aren’t likely to drop dramatically enough to spur a long duration refinance boom. Without a durable flood of volume, lenders need to remain protective of their bottom line, growing strategically without burdening their business with ballooning costs.”
Keeping fixed costs at bay doesn’t mean you can’t access top talent as you aim to sustainably grow your business. By employing solutions like Maxwell Fulfillment, Maxwell Capital, and Maxwell Private Label Origination, you gain access to 100% onshore processors, underwriters, and closers. These professionals work as an extension of your team, adopting your process and operational intricacies. The only difference is that rather than incurring costly expenses related to hiring full-time employees, the Maxwell team supports a variable cost model and invaluable resilience to volume ebbs and flows. Maxwell’s on-demand underwriting, for instance, provides tenured talent without a minimum volume requirement, allowing lenders to easily fulfill a temporary influx in volume.
“Now is the time to carefully consider which business functions should remain in-house and which would be more successful outsourced,” says Alan. “By offloading some of their operational tasks to a trusted partner, lenders can arm themselves with powerful, cost-effective resources that will improve the bottom line, while allowing more mindshare to focus on levers to drive growth in this year’s market.”
Get your free copy of The 2024 Lender Playbook: 4 Tips to Drive Profitability in a Recovering Market
Want to get more advice on how to drive down costs and improve your lending processes this year? Download our new eBook to learn:
- The reasons why 2024’s path to market recovery won’t be linear, including how this year’s election could impact interest rates
- How to ready your lending business to capture intermittent volume as it reemerges without the burden of fixed costs
- Why access to real-time data insights will be a major differentiator in 2024—and how lenders can gain those analytics cost effectively
- The game-changing benefits of reinvesting in borrower relationships at a time when home buyers need lender support most
Download your copy to get exclusive advice from Maxwell leadership.
Get your free copy of Maxwell’s 2024 Lender Playbook: 4 Tips to Drive Profitability in a Recovering Market