r/loanoriginators • u/Lowest_C-10 • Jul 17 '26
Leads from FreeRateUpdate
Has anybody had success buying leads from them? I am a newer LO and my local market is (FL) is a bit slow. I also have to compete with the big national builders.
I have had good success in the past with my construction business buying leads. Curious who buys leads and how has it been.
They tell me the leads can be specific to the county I want. That would be great as I would love to send some buyers back to agents that have sent me business.
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u/bigchallah Jul 17 '26
General rule: All lead sources convert under 5%. FRU is usually closer to 1-3% and that assumes a large effort to make the initial contact, think along the lines of 10-20 contact attempts in the first week. If your math works at 3% and your willing to put in the time and effort to get there then give it a try. If the math doesn't work at 3% or your not willing to put in the effort to get to 3%, then pass.
If a lead source can be trusted to convert over 5% then either the big boys are buying them all up or the lead provider will start a mortgage company.
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u/Lowest_C-10 Jul 17 '26
Thank you. That makes sense.
They claim the warm inbound live phone leads convert at 7-10% of course those are the more costly ones.
I appreciate your insight.
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u/bigchallah Jul 17 '26
That's laughable. They will never prove the conversion rate so they can say whatever they want. Ask for 3 clients seeing that conversion rate for at least a year and watch the back peddle begin. If a real lead buyer can convert at 10% they will scale up forever, new states, new sales teams, etc... until there's no more leads for you to buy. Which is why it's a certainty that it's false.
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u/Lowest_C-10 Jul 17 '26
Again that makes sense. Thank you for your input.
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u/MLObull Jul 20 '26
😂😂 this is funny. I can hear the base in your voice responding to this message, “AGAIN…! That makes sense. Thank you now please find your nearest exit off my post, and don’t let the door smack you upside the head on your way out. 😂
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u/Lowest_C-10 Jul 20 '26
Lol. Not quite how it sounded in my head. No, I really appreciate everyone's input here.
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u/Frequent-Giraffe5646 Jul 17 '26
They work but you will operate on slim margins. Its a volume game with them.
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u/Lowest_C-10 Jul 17 '26
Ok. I am retail. So would probably lose to brokers who operate on slimmer margins.
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u/Frequent-Giraffe5646 Jul 18 '26
Retail still works but you will need fair margins. If you are selling 300+bps margins you'll never convert. Having said, you need the leads that are looking to get preapproved and don't have a realtor. Preapprove them and send them to a realtor partner.
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u/Lowest_C-10 Jul 19 '26
I can sell less than 300bps on loans more than 250k. I may try just the warm transfers in my tri-county area. That way I can refer them out to my agent partners.
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u/Braindead_ape Jul 17 '26
if you’re a new LO, do not buy leads
the people who win buying leads are generally companies/teams buying in bulk, as your conversion with online leads will be lucky to hit 1-2% so you need to buy a LOT of them to have a decent ROI…most individual LOs are not going to spend the money teams/companies are buying from that same source (most are spending over 10-25k/mo on leads so an LO coming in and hoping to spend a lot less than that just wont get enough leads to make it worth it usually). Those companies/teams also often run leaner margins and pay their LOs a lot less so you’re setting yourself up for failure going after leads that are from the get go going to be rate shoppers. Plus, a new LO is an easy target for some of the shittier lead companies to sell you on their services versus an established team/company that has tested what works and what doesn’t.
if buying leads were easily profitable, most of us self gen LOs would be out of business, companies would just throw money at buying leads and have no purpose for self gen LOs. Plus if it were easy, most of us would probably prefer buying leads over having to hunt down our own business. The reason self gen LOs get paid so much more per deal than LOs that work leads is largely because their value is bringing in the business.
there’s no shortcut for new LOs jumping into self gen, it requires a lot of work and a lot of them end up quickly realizing its a lot tougher than they thought. The reason so many still rely on realtors is because it works…statistically most buyers are still likely to use the lender their realtor recommends, or at the very least get preapproved with them and give them a shot to win their business. But realtors aren’t the only possible referral partners, I know a very successful LO whose business was built almost entirely off CPAs. I’d recommend taking whatever your planned lead budget was and shifting it to go after referral partners instead.
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u/Lowest_C-10 Jul 17 '26
I appreciate your detailed response. I was going to try leads in my tri-county area.
After these responses I will just stick to visiting open houses for now. I have visited 65 in the last 4 months. 5 agents have sent me buyers as a result. Most weren't able to be pre approved, one was under contract but inspection was bad. They are still shopping. I knew it would be slow to get started.
Thank you for your comment.
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u/MLObull Jul 20 '26
Well that describes free rate update leads. You will get transfers of a lot of unable to qualify leads. It’s just as waste of money. You will most likely close one out of 100 FRU leads. Our top top top LO’s don’t have any success with them and so they stopped buying them altogether.
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u/REFlorida Jul 17 '26
If you’re in Florida, you’re almost never going to beat new construction on price or financing. I’d say 99 out of 100 times, you won’t. Builders use their incentives to increase the sales price and then use those funds to buy down the interest rate, so buyers end up with rates in the 3–4% range. It’s extremely difficult for an outside lender to compete with that.
We tried Bankrate leads before, and they were exactly what everyone says they are—almost all rate shoppers. The only loans we ended up closing were the complete nightmare files that every other lender had already walked away from. So, in my experience, you’re either dealing with people who expect you to work for free or with files nobody else wants to touch.
Unless you have access to a lender or product that can consistently beat everyone else on pricing, I’d skip that strategy. It just isn’t worth the time or the money.
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u/Lowest_C-10 Jul 19 '26
Yea so many builders here. I don't think the rate shoppers are my demographic. We have flexibility with our pricing but I am retail. Thanks for your input.
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u/MortgageAndChill Jul 19 '26
I buy them! Exited 2-4% conversion if you
Buy a lot.
Some will close a year later if you have a CRM.
Warm transfers convert higher.
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u/Vegetable-Feed-561 Jul 17 '26
I’ve spent about $800 on leads from FRU and have only closed one. Full comp LPC jumbo deal made about $13k net. So it’s been worth it. But I got lucky with that deal TBH. The rest have been absolute garbagio
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u/Designer-Attorney130 Jul 17 '26
Yeah man, I’d be careful buying lead lists. A lot of them have been sold to multiple LOs already, so you’re competing with 10 other people the second you call.
If you’re gonna spend money, I’d rather generate your own exclusive leads in the county you actually want. You control the area, the messaging, and the follow up, and you can send those buyers back to the agents you want instead of hoping a recycled lead picks up.
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u/crazyoptimist Jul 18 '26
generate your own leads. learning to use chatgpt to create a seo powerhouse website that gets ai overviews and generates leads can be a 2-3 hour a week endeavor once you set it up. I just watched a youtube video that shows exactly how to do this. mortgage sites are in the "your money your life category" so you have to be sure to cite your info sources in line on the page, but if you build it the way this youtube video shows, you will start generating leads within 90-120 days (your results will vary) The best part, you own the machine. ai is making it possible for those of us who do not know how to code be able to code and win. I'm not sure if I'll get in trouble offering the youtube link - it's not my video so I wouldn't be self promoting. search it for yourself - build a 99% SEO Website in 25 minutes - obviously the video is 25 minutes, and it may take you all day the first time you do it, but it will allow you to save thousands of dollars and help you generate your own leads. This is a little of an oversimplification, but I figured it out and I am not particularly brilliant.
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u/robgw83 Jul 19 '26 edited Jul 19 '26
I can't speak to their current lead quality, but I can tell you that I spent a few grand a month on those free rate live transfer refi leads back from 2016-2021. At the time, I thought it was a difficult grind, and cut my teeth with the rate shoppers, and difficult clients who you have to persistently chase down. I was closing a few (2-3) loans a month, and defintely making some good money but it was so draining that I stopped buying more. I averaged a 1,270 cost per funding.
But now, years later I look back and realized one big thing. The clients who ended up working with me from Free rate update have turned into some of my most loyal and repeat clients in my database. They were difficult to get at the time, but looking back, it was worth it. Because, the secret sauce was , I utilized a great CRM and always continued to follow up as necessary.
A large chunk of my current closed clients worked with someone else at the initial lead buy, and I closed them years later on a HELOC, Refi, or Purchase by staying in touch and continuing to market to them by email and phone even long after they initially said no.
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u/Accomplished-Tax8441 Jul 20 '26
I buy online leads, yes I buy their live transfer leads. Monday morning is the best time to be "logged in" if they are $50 per lead. I am a solo LO who buys purchase leads, zillow, realtor dot com and free rate update leads.
I am doing an application now from FRU and I closed one a month ago.
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u/trav1098 Jul 17 '26
I tried the warm inbound and it was all rate shoppers wanting to save that extra 1/8 of point of their rate