For the relatively short period of time I’ve been on your planet, I’ve discovered something that doesn’t really exist on my home world: Music! With our recent discussions around your millennial members, the title of one particular song keeps running through my brain…
You Were Always on My Mind
While millennials haven’t ALWAYS been on your mind, I think you’d agree that they’ve moved front and center in recent years as they become viable home owners. That said, let’s continue our previous discussions, shall we?
So far, we’ve looked at how to get your millennial members started once they decide they want to buy a home and provided details that help educate them on what exactly a mortgage is. Now that they’re up to speed, it’s time for them to select a lender.
As much as we’d like to think that our credit unions are the obvious choice, that’s not always the case. I mean, it should be; after all, it is our firm belief that credit unions are the best path to home ownership. So how do we convince our millennials of that?
Transparency is the key. It is something that we pride ourselves on, because what is a good partner if there isn’t complete trust and nothing is hidden? Be frank and honest with your millennials when they come to you with questions and inquiries. You’ll quickly discover that they will appreciate it and, most likely, reward you with their partnership!
Of course, there is an off-chance that they may feel there’s a better fit for them with another lender. While we all know the grass isn’t always greener on the other side, it’s our job to convince them of such in a member friendly and focused manner. The best place to start is to address what’s at the top of their minds: How much will this cost?
Break down the costs associated with a mortgage by explaining the key elements: interest rate, points and fees.
The most significant factor in how much their mortgage financing will cost is the interest rate. Although interest rates are primarily out of their control, one option they may consider is paying points on their mortgage. Explain it to them like this…
Paying mortgage points means paying more up front to get a reduced interest rate. Often referred to as “buying down the rate,” this option is enticing for borrowers who a) have additional cash to use at closing and b) plan to own their home for a long period of time. Remember that a point is equal to one percent of the principal amount of their mortgage.
In addition to interest rates, there are several set fees as well as specific lender fees and special offers. Some of these vary by lender while others are more or less the same no matter whom they choose to borrow from.
Some of the major fees that they’ll need to consider include appraisals, insurance (homeowners and title), transfer taxes, underwriting and originating fees, etc. And these fees add up quickly! This is where transparency comes into play. Reassure your millennial by letting them know that they will receive a breakdown of all costs within three days of their application.
In addition to questions and inquiries on costs and fees, you must anticipate other questions from your millennial members, such as:
Who is my point of contact and how do I reach them? Due to the nature of a home purchase, the loan process can sometimes be emotional or stressful. Because of this, it’s important to make yourself available to them.
How long will it take to process my application? There are a lot of variables associated with this question, so be sure to give them an honest estimate based on your credit union’s process. This is the perfect opportunity to let them know that they play a large part in the timeliness of the process—the quicker they provide you with any necessary documentation and respond to your inquiries, the quicker the process will flow.
How will I be notified of the status of my application? Keep them in the loop. Consider using an automated tool that notifies them of key milestones through electronic communications (remember, these millennials LOVE their mobile devices).
Is my information secure? As much as millennials desire to keep everything digital, they are also cognizant of identity theft and fraud. Provide them information on your credit union’s security practices and inform them of all the actions you take to ensure their information is secure.
Still need one final tip to convince your millennial that a mortgage through your credit union is their best route to home ownership? Remind them about your relationship: they are already your partner and receive benefits that other lenders may not be able to offer. Plus, you already have access to much of their information needed when applying, which saves them a lot of time and frustration. And you’ll be there for the long term, throughout the life of the loan.
Remember to always keep your members “on your mind” and they’ll be sure to return the favor!