What Millennials Look For In A Mortgage Lender

It has taken a year or two longer than expected, but Millennials have finally started to enter the home buying market. This move has been long anticipated and is a welcome sight to those of us in the real estate industry. As the first generation to out-number the Baby Boom generation, Millennials present an enormous opportunity for all segments of our industry from Realtors to Settlement Agents. 

As with any new customer segment, Millennials have a unique set of preferences when it comes to how and with whom they do business. As the first true internet generation, they came of age in an era when new technology was appearing every year or two. The internet, mobile technology and social media became necessities to their lifestyle and not just a convenience. While these technologies may seem inconsequential, the information, communication and vast about of information they placed in the hands of Millennials helped develop a generation that, in many respects, differs from their parent’s generation as much as the Baby Boomers differed from the generation of their parents.

Lenders looking to capture a share of the Millennial market will have to adopt new marketing and customer service techniques that cater to Millennial’s preferences. Some of these techniques are easy to adopt and many of us have, in our wait for the Millennials to show up in the market, already put them in place. Interactive web sites, a strong social media presence and the ability to conduct business in the cloud and over mobile devices are a few examples. Yet other techniques are harder to adopt or take time to develop.

 Having spent their childhood and adolescence online and sharing through social media, Millennials place a high level of importance on peer opinions and reviews. They conduct extensive research on the companies they do business with and seek reviews and peer input from many different places. For lenders attempting to attract Millennials, old marketing strategies will fall flat and new strategies that encourage your customers to tell your story through reviews and comments will have to be developed.  

An off-shoot of their social media lifestyle is that Millennials are a socially conscious generation. They actively seek out and do business with “authentic” companies that give back to their society on the local, regional or national level. As we discussed in our post “The Authentic Company”, being “authentic” is as simple as staying true to who you are as a company and operating in an ethical manner. It is a philosophy that must permeate the company from top to bottom, but lenders that adopt the philosophy will be more attractive business partners to socially conscious Millennials.

One reason Millennials were slightly delayed in entering the home buying market is due to the sizable student loan debt the generation carries. This financial burden coupled with slow wage growth and years of tight credit has made coming up with a 20% down payment very difficult for young potential home buyers. As such, Millennials are seeking loan products that address their existing financial conditions. Lenders that offer government backed loan packages from the FHA, Fannie Mae and Freddie Mac that require lower down payments are increasingly attractive to cash-strapped Millennials.