Accenture Report- Millennials: Your Mortgage Lending Present and Future
Accenture has put together a concise PDF document outlining the current mortgage lending situation for millennials. The underemployment of millennials stemming from the recession and housing crisis has led to an unsteady amount of debt, and ultimately the preference to rent versus purchase homes. However, Accenture’s document highlights the necessary steps to bring millennials back into home buying market through effective lending and support practices:
“This group needs encouragement – and education – to make sound homeownership decisions. From student loan debt, to unemployment, to high rental costs, they are facing a number of hurdles. Despite this, they benefit from the stability and wealth building opportunities that come with buying versus renting. Therefore, you must fully engage with Millennial borrowers by informing them about the benefits of buying a home as well as the home buying process – before this process even begins. To do this, offer courses about a variety of financial topics, including mortgages. Make them short and digestible. Offer online educational content via social media and your website. Include videos and short articles, including infographics. Make all web content mobile-friendly. Remember that your engagement with this generation should not be seen as a one-sided, onetime interaction. Be a partner in the financial process, someone who can guide them through mortgages and more.
The financial challenges this group face are temporary. Employment is projected to improve and student loan debt should decrease. As a lender, you can coach borrowers on making the appropriate decisions in regards to renting versus owning. It requires engagement, thoughtful strategy and continuous education, but the time is now to seize this opportunity
Millennials stand apart from previous generations largely because they are immersed in technology. The first generation to grow up on the internet, constant connectivity is built into their lifestyles. This represents a departure from previous age groups, where talking on the phone and interacting face-to-face was essential, at least for initial contact. Companies like Amazon were quick to adapt their approach, opting for a website versus traditional brick and mortar. With apps like Zillow and Trulia, this group does most of their shopping, including home shopping, starts on the internet.
It is a logical extension then that Millennials will also begin their mortgage shopping online. Tech-savvy, and also information-savvy, expect them to do the bulk of their research before approaching you. Therefore reaching these potential borrowers where they spend the most time – on their phones, tablets, and computers – is crucial. They need easyto-access information and tools at their fingertips, and this reach must extend to the mortgage application itself. You can no longer email a PDF 1003, or worse yet, provide a paper 1003. Keep the process easy, simple, and accessible via the internet, including:
- A web portal, where borrowers can apply quickly and easily.
- Calculators and short, educational information for borrowers to access. Remember, they need reassurance that they are making the right decision.
- Mobile capture technologies to allow your borrowers to upload documentation to their loan file – from wherever is convenient to them.
- Electronic signing of documents – whenever possible.
- Quick follow-up and proactive communication throughout the process. From the initial application to documentation and e-signature, investing in new technologies is essential to attract and retain Millennial business. While it may initially seem that simply offering advanced technology will attract new business instantly, this is merely one part of the equation.”