Millenials are buying in larger and larger numbers, so the question is “what is the best way for lenders to reach them?” At an MReport webinar titled Hottest Buyers on the Block: Reaching Millennials, presented by Ellie Mae, a panel of experts answered this question.
Opening the proceedings, Kathy Cummings, SVP, Bank of America, who was also the moderator for this discussion, gave insights into the challenges faced by millennials that makes them think twice before becoming a homeowner. Student loan debt she said was one of the challenges, to what could be a tremendous buying power. The digital mortgage revolution though was an opportunity to reach more buyers in this cohort.
She said that high-tech, high-touch components such as bank statements, loan records, and credit card information that could be compiled without paper statements, and the ability to pause the application process and speak to a lending officer to get answers, were just some components of digital mortgage technologies that were making the mortgage process easier for this group.
Speaking on millennial homebuying trends, Jonas Moe, SVP, Market Strategy, Ellie Mae, shared the findings of a survey on homebuyer trends, which showed the main reasons for why millennials buy homes, and what they looked for when loan shopping.
The top factor millennials considered when applying for a loan online was not convenience or simplicity, but security. Millennials want certainty and efficiency when applying for a loan, which is why, according to the Ellie Mae survey, many millennials feel that more face-to-face interaction and faster processes would improve their mortgage application experience.
Mark Palim, VP, Deputy Chief Economist, Fannie Mae, noted that millennials seek out the advice of the lenders, real estate agents, and friends and family more than information online sources and other media sources, reinforcing the desire for face-to-face assistance rather than technology, adding to the sense of security they strive for.
Marion McDougall, EVP, Chief Loan Administration Officer, Caliber Home Loans, gave some suggestions to lenders on how to adapt to what millennials want out of a mortgage experience. For example, millennials expect multiple options when it comes to communication: text, chat phone, in-person, etc.
Additionally, the old real estate agent first, lender second was outdated according to McDougall.
According to Jorge Davila, VP, Direct Lending, Flagstar Bank, millennials wanted to select a lender first, to guide them through the buying process, before selecting a real estate agent. This he said was best achieved through an integrated, omnichannel mortgage lending experience, where every channel of communication is available in order to make the lending experience as smooth and customized as possible.
Millennials could also use some education when to comes to lending. Davila noted that many millennials falsely believed that a 20 percent down payment was required to put down on a home, which means many are much closer to buying a home than they realize.
Click below for the full webinar: