If you have been following the population statistics closely, then you will know that millennials are the largest demographic in America today. It is these people who will eventually buy a home someday, opening up a prospect of increased business opportunities for loan officers and mortgage lenders. However, it is not that simple to convince millennials to invest in a home, especially when they have lived in times when home market is at its all time low. This is the reason It is time to switch tactics and learn to talk to them in a language that they understand.
Here are some tips that will help you educate potential millennial customers about making the the most crucial financial decision with an informed mindset.
Try to Understand Their Thought Process
Millennials are to be treated unlike any other living generation before them because they have lived in an information age and have known the ugly truth about housing market that once hit rock bottom. They are living in a time when they didn’t know of interest rates averaging above 5%. So if you are talking to a potential home buyer who thinks 4% rate of interest is reasonable, don’t blame them or call them naïve. Instead, you should shed all your existing assumptions and try to make them understand about how times have changed and why they must act now.
Help Millennials Move Out of Their Parents’ Home
A millennial living with his/her parents is surely considering moving out. However, the loan officer needs to realize that among these people, most of them would prefer to have a home of their own. But the problem with this plan is that the older millennials, aged between 25 and 34 years, do not have enough savings to realize this dream. However, it is not uncommon for first time homebuyers to put less than 5% as down payment. As a loan officer, it can help to sympathize with the millennials and their apprehension about rising interest rates. It is your job to show them how closing on a home now, before the rates increase again, can lead to big savings in the end.
Share Historical Data to Add More Perspective to the Discussion
The best way to talk to a generation of practical people is by showing historical data. According to Freddie Mac, the averaging interest rate for 30-year fixed mortgage is 4.15%. This figure in itself will mean nothing, unless put against other figures from the last few years. 4% may be a low rate for now, but it is important to explain to the prospective homebuyer that it has the potential to go up, rather than go down. Showing them data from decades ago when the market had 2-figure interest rate will help you gain their attention.
Discuss Numbers They Will Understand
Looking at the interest rate percentage alone does not reveal complete picture until it is translated into more comprehensible numbers. Give your millennial clients a hard look into what these numbers will mean in cash, as in monthly payments. Make them see how changing even a few points on the interest rate may seem insignificant right now, but over the course of their loan it can add up to become a large amount of money. Show your borrowers what a difference between 4% and 5% interest rate can make to their monthly installments. This obvious difference will create positive urgency to take action before it is too late.
Discussing home buying with millennials or baby boomers is a task best handled by an expert. While you are busy convincing millennials about interest rates, give Expert Mortgage Assistance a chance to take care of your backend activities. With over 8 years of experienc3e in outsourced mortgage operations, our team is equipped to handle even the most complex mortgage services within strict quality standards and stipulated time frames.