Millennials, those who were born between 1981 and 1996, have been the biggest generation purchasing homes and the mortgages that finance them for at least a decade. But Gen Z is gearing up to replace them with an impressive 37% of that generation hoping to become homeowners within the next one to three years, according to Stratmor Group.
If you are a new loan officer – perhaps a member of the Millennial or Gen Z generation yourself – it’s important to remember what sets these two generations apart from the ones that went before them in the homebuying journey. Understanding their strengths, concerns, and how they operate will help loan officers develop and deepen their relationships with Millennial and Gen Z borrowers.
One of the most defining attributes of the Millennial and Gen Z generations is their ease and adeptness with technology. They organize their lives with and around technology, and they’re savvy with it. Their comfort with technology also feeds into their more progressive mindset. These individuals are not old school – in fact, far from it. They are open to new ways of doing things and much more digitally inclined and mobile device-oriented than older generations. Let’s face it. When you grow up accessing answers to every question, food delivery to your doorstep, and shopping with the touch of a button, you are going to be wired to want answers fast.
When it comes to buying a home and embarking on the home-buying journey, these generations are worried about many things – do they have enough money for a down payment, can they afford the monthly mortgage payment, how much money will be needed to maintain the home, will increasing home insurance costs put homeownership out of reach, etc. Certainly, other generations have had the same concerns, but younger homebuyers tend to think they are alone in dealing with these worries.
Therefore, a loan officer’s number one job is to create certainty for these borrowers. They want to know all the specifics about their financing options and the mortgage process up front and right away.
Loan officers can alleviate younger homebuyers’ concerns and create greater certainty about their homebuying journey through education. And this is where technology can be YOUR friend. Today’s social media platforms are where these generations live. So, to meet these borrowers and engage with them, develop short videos about different mortgage process-related topics and post them on TikTok, Instagram, and YouTube. Videos are wildly popular. In fact, according to Lemonlight.com, in the last year alone, 70% of Millennial YouTube users watched YouTube to learn something new or learn more about something they’re interested in. That figure climbs to 80% for Gen Z.
Older generations are less inclined to become educated this way. They generally take what information is given to them at face value (i.e., you’ve been approved for this kind of loan, this is the rate, this is the term, these are the fees, etc.).
One thing is for certain when dealing with millennial and Gen Z borrowers, loan officers cannot do the bare minimum anymore. You must make their experience a rewarding one every time. The good news is there are a number of things younger loan officers are particularly good at:
Ultimately, the LOs who are successful at engaging with younger homebuyers know it is not enough to say everything will be fine – you must show them how everything will be fine through education. Take time to ensure they understand the basics about their mortgage and the overall cost of home ownership:
These terms and acronyms are often taken for granted by experienced LOs – or ignored altogether. But when you’re dealing with someone new to the home-buying process, ensuring their complete understanding is the number one thing that will solidify your relationship with them.
In this digital information age with everything at our fingertips, it’s easy for younger borrowers to believe they know more than they really do about purchasing a home. That’s where the help of a knowledgeable loan officer comes in. When it comes to successfully courting younger borrowers, technology, communication, and consistent education will help you build lasting relationships.
If you’re interested in learning about the tools Mortgage365 offers to help loan officers more effectively engage with Gen Z and millennial homebuyers, please contact us at sales@mortgage365.com.