The New e-Reality and How Housing-Industry Professionals Can Adapt
The new, one-size, online mortgage solution, may not fit all borrowers – nor should it. When technology can be used to foster a more customized experience, why force conformity? Within this disconnect lies your greatest advantage.
The beauty of these technologies is that you can use them where they best suit you and opt for the personal touch when you need that too.
Finding the Right Mix
While a seamless, paperless electronic experience is attractive, financing a home remains an emotional undertaking for most clients. It isn’t just due to the amount of dollars involved but also the unfamiliar process clients have to navigate. If you’ve never bought a home before, you are learning new terms, concepts, acronyms, etc. you may have never been exposed to before. Even if they’ve bought a home before, memory fades after several years and your clients will likely need refreshers. Having a trusted Loan Officer and/or Real Estate Agent talk them through some of the more confusing parts of the transaction or give insight into the “big” decisions. (For more on that, see below.)
Generally speaking, millennials are known to want to do their preliminary research online and this research phase may last several months or longer. And once they are already researching online, the progression to finding a Loan Officer or Real Estate Agent online often happens naturally as they get closer to the “decision-making” phase of their research.
A recent study conducted by Velocify on the digital mortgage experience found borrowers are 3.7 times more likely to find a lender online today than 5-10 years ago. This migration to an online search held for all age groups, with millennials being the most likely to surf before applying.
Leveraging Technology for Communications
The Velocify study also reinforced the need for Loan Officers to not only adapt technology to facilitate their communication efforts but also version it for specific audience groups. For instance, millennials predictably prefer to communicate more through chat functions during the actual application stage. For the remainder of the process, they expect to conduct business by phone.
Meanwhile, gen Xers showed a preference for email and sought minimal phone contact throughout the process. Baby boomers were most responsive to phone and in-person contact. All three groups prefer using email after closing, as well as an online portal for prequalification and to submit applications.
The Reality of Your Value
As a professional with accountability and knowledge, you are still driving the bus, so to speak. With the extensive advertising budgets of the online-only borrowing solutions shining a spotlight on their lending processes, you have an opportunity to contrast the value you bring to those advertised solutions.
This is known as the “in-market” advantage or “personal-touch service.” After all, as a Loan Officer your entire day is about working with and guiding clients through the selection of the most appropriate mortgage for their situation and at the right terms. As more and more millennials reach homebuying age (it is a very big generation) and though the oldest of the cohort are nearing 38, the younger millennials are still in their early- and mid-20s. In fact, the largest segment of millennials has not yet reached 30 so there are still millions of potential buyers waiting in the wings.
The Long and Short on Rates and Terms
Though clients can do rate shopping online, it’s important for them to understand the numbers used are very general and each client’s financial situation, employment, income and payment history are all going to have an impact on what loans are available to them. And if they qualify for multiple loans, which one is going to be right for their individual needs and goals? This is where a skilled, in-market Loan Officer is invaluable as you explain the short- and long-term dynamics of each and find the option that is most in line with their goals.
Though it seems like everything digital is evolving at a dizzying pace, there is still no substitution for a little one on one with a knowledgeable coach. Helping them understand all of this is exactly where you add value and that is essential to competing in the new e-reality.