Millennial borrowers have been slow to enter the mortgage market for several reasons, but mostly because of weighing student loan debt and a wariness of the financial industry.
As homebuyers in this age bracket save for a down payment on their first house, they spend time researching the mortgage process, breaking it down in understandable sizes in order to prepare themselves for initial meetings with lenders that will need to earn their trust in order to win their business. When it comes time to choosing a lender, millennials look for providers they can trust above all else.
Here are two ways for mortgage lenders to start building trust with millennial homebuyers:
- Communicate clearly and concisely
- Ask for feedback and consumer reviews
Keep Communication Crystal Clear
The single most consistent trend you should uphold when building trust with millennial homebuyers is to stay clear in your communication.
Every interaction should be as plain as day, because unlike the originators who hold a degree in finance or the brokers who’ve been in the industry for 20 years now, first-time and younger buyers aren’t always accustomed to the jargon.
The National Association of Retirement Plan Participants reported earlier this year that there was a “15 point drop in general financial knowledge on investing and savings.”
What comes with a decrease in financial knowledge is an increase disconnectivity and disengagement.
Not only is it time consuming to research and sift through all the fine print, it can be frustrating when the meaning of which is unclear due a lack of familiarity with the topic. That’s where the disengagement comes in.
To reverse that and build trust in this situation, it’s important to ask questions and listen as much as possible to see where homebuyers are at with everything: the search, gathering documentation, understanding rates, disclosures and options.
This way you’re listening to their specific situations, allowing you to personalize your service.
By spending time breaking things down, including what’s needed of them -- like, different loan options and fees -- chances are, they're going to thank you for acting in a transparent way.
Not only will this help to alleviate a fair amount of anxiety that comes from closing, but it’ll also reflect back on you later on, most likely on the web.
Word-Of-Mouth Recommendations Drive Awareness
Word-of-mouth recommendations are still a major driving force for the mortgage industry.
The Global Banking & Finance Review reported that 93 percent of consumers recommend services to others after being asked for input and to write reviews by the business. The significance of which is reinforced by findings from the National Association of Realtors® (NAR).
Across all age groups, the NAR found that homebuyers are most likely to work with an agent who was referred to them by a friend, neighbor or relative. This finding for real estate agents, specifically, holds true for businesses on a wider scale too.
About 85 percent of consumers find out about businesses through word-of-mouth recommendations. That percentage is higher than any other means, including search and social media.
If your purchase business relies mostly on referrals, you should pay particular attention to how important it is to build trust with your clients, specifically those in the millennial bracket.
Here are a few ways to encourage recommendations and engagement with millennials:
- Ask past, present and future clients to summarize their experience on web portals, including Zillow, Trulia and Realtor.com.
- Facilitate chats on Twitter, asking clients what makes for a positive closing process, what they like from a lender, and what could be better.
- Comment on Facebook, LinkedIn and Instagram posts to stay top of mind, while encouraging feedback on your service.
Web portals are among the first points of contact for all homebuyers. They look for houses, mortgage rates, and information on the houses and neighborhoods. But, they also go looking for professionals who have a clear-cut way of doing business, which is perceived by the ratings and reviews associated with loan officers.
If you’re able to get in front of reviews by asking past clients to sum up their experience, it works in your favor down the line when you’re rankings are consistently high, relevant, and recent.
Just like web portals, social media platforms are an easy way for millennial homebuyers to see if you’re the loan officer they want to work with. There are a few tell tale signs that are positively received.
To help show buyers that you can be trusted, you want to keep your profiles up to date with educational content and current industry trends, as well as show your personality and professionalism through conversations with others.
This could be done through Q&A-style conversations with consumers, or this could be personalized interactions with past or present clients.
Whichever, it’s going to show those in the market who are considering working with you that you’re enjoyable to working with and you’re a trustworthy leader in the market.
- Millennials look to professionals they can trust. It’s the number one trait they’re looking for in a loan officer.
- Your communications needs to be clear, so skip the jargon. Part of millennials’ disengagement with the financial services industry is that there is a decrease in general financial understanding. You can help curb uneasy feelings by keeping every interaction as transparent as possible.
- Asking for feedback and reviews leads to higher satisfaction and a greater likelihood of word-of-mouth recommendations. Homebuyers and sellers are still most likely to retain a professional who’s been recommended to them by friends or family, and when you’re business relies on recommendations, it’s imperative that you’re perceived favorably.