The Millennial Generation and Its Effect on the Mortgage Industry
The Millennial generation (often defined as those in the 18 - 34 age bracket) is forcing rapid changes in the mortgage industry. According to a 2016 Pew Research Center report, as the first generation of home buyers consisting of “digital natives,” Millennials are far less trusting of traditional institutions like big banks. And if lenders want their business, they will have to meet Millennials where they are — online.
As we begin to serve a new generation of homebuyers, here are four changes that the mortgage industry should consider in order to meet the expectations of this new generation: The overall customer experience is critical – this includes making home buying convenient. More lenders are implementing technology that enables borrowers to submit documentation digitally. At FirstCapital Bank, we offer an online application through our website that helps make the application process much simpler and more accessible.
In addition, lenders need a company website that is informative and easy to use, giving millennials a feeling of being “empowered, instead of being sold to.” Lenders ought to take heed, noting that this is a “do-it-yourself” generation that looks to the internet for information. Millennials also value transparency. They want to know where their loan is in the process.
In an age of technology, Millennials expect a speedy and reliable process and when it comes to mortgages, they will do their part to move the application along quickly. Although they may be a little apprehensive about who they go to, once they’ve built a relationship, they’re exceptionally trusting in sharing the information you need to make the loan process move smoothly and quickly.
However, Millennials face a unique set of challenges. Many young couples are carrying a lot of student loan debt. Their jobs are great, but they don’t have 10 to 20 percent for a down payment.
Most Millennials are frustrated that they pay a substantial amount every month in rent that does not contribute toward building equity or an investment nest egg. So the faster they get into a home, the less money they throw away on rent. The vast majority of these millennial buyers, in the absence of getting a gift from a family member, simply don’t have enough down-payment cash, plus money to cover closing costs and post-closing money left over in the bank as reserves.
However, by helping educate customers on the involvement of the mortgage process and helping them look at home-buying options, FCB’s seasoned mortgage team can help! Let FirstCapital Bank of Texas make your home buying dreams a reality!