Hunt Gersin is the president and CEO of Your Neighborhood
Sales Consultants, a national consulting company focused
on the mortgage business. Gersin has over 25 years of experience in the mortgage and real estate industries and is an
award-winning entrepreneur. Reach him at (810) 444-9614 or
Millennials Need a Human Touch
This tech-savvy generation values smartphones, independence
and guidance from trusted experts
By Hunt Gersin
The millennial generation, typically de;ned as those born between the early 1980s and 2000, in sheer numbers is staggering, encompassing an estimated 83.1 million
Americans — more than a quarter of the nation’s population. To be successful as a mortgage originator going
forward, you have to ;nd a way to tap into the potential
of this still-emerging and powerful consumer force.
As part of that, it’s important to understand the
common threads among millennials that, at least in
theory, tend to promote or detract from homeownership. For starters, research shows that millennials have
a strong sense of loyalty toward the local community.
They value their families (especially their parents) and
are the most-educated generation in history.
Although these are all positive attributes, it’s
important to note that millennials as a group also have
unprecedented student-loan debt — estimated at an
average of $28,400 per college graduate. It’s understandably di;cult to save for a downpayment with so
much debt. The decision to purchase a home also is
often tied to job prospects. The ;exibility that comes
with renting — a path chosen by many millennials to
date — can be an advantage in the recovering labor
market that is still in play.
Millennials also are aware of today’s tight lending
environment. A survey by the Federal Reserve Bank of
New York suggests that some 22 percent of borrowers with credit scores below 680 may decide not to
apply for a mortgage because they feel discouraged
by a prior application rejection, their dour employment prospects or the burden of paying down existing
debt — such as student loans. Many millennials also
are delaying marriage and having children, two major
drivers of homeownership.
For all of these reasons, there is cause for concern for
mortgage originators seeking to serve this population.
Despite the challenges, however, millennials are the
key to ensuring a robust housing market in the years
ahead. So giving up is not a sound option.
Now, here’s the good news. According to research by
Trulia, 93 percent of renters ages 18 to 34 do expect
to buy a home someday. Even more telling are the
;ndings of the 2015 TD Bank Mortgage Service Index,
in which 50 percent of millennials surveyed say they
are either “extremely” or “very likely” to buy a house
within the next year. This overwhelming percentage
suggests many millennials have a strong desire to
become homeowners, and it is up to mortgage origi-
nators and other real estate professionals to help make
that quest a reality.
Typically, the homeownership cycle begins with
the ;rst-time homebuyer purchasing the home of a
move-up buyer. This cycle of real estate starts with
the millennials, who currently have the largest share
of ;rst-time homebuyers ( 68 percent) among all generational groups. Saving for a downpayment is a challenge for homebuyers in any generation; however, it’s
a signi;cant issue for millennials, a generation saddled
with substantial debt.
The objective, then, is to match this massive wave of
potential millennial homebuyers with the right mortgage products. Government-backed mortgages, such
as Federal Housing Administration (FHA) loans and, to
a lesser extent, U.S. Department of Agriculture and
U.S. Department of Veterans Affairs loans, seem to ;t
the bill. These loan products are gaining momentum
in today’s market because of the lower-downpayment
requirements for ;rst-time homebuyers.
Another product, the FHA 203(k) renovation loan,
also has great potential because it o;ers the combination of a low-downpayment purchase loan coupled
with home-improvement ;nancing — an attractive
package for millennial homebuyers, who tend to value
making investments in their local communities.
Opening the door
To best serve prospective millennial homebuyers as
a mortgage professional, it’s important to study their
habits and preferences. On the communications front,
many millennials would much rather text or e-mail you
than talk with you on the phone. They thrive on their
smartphones, always researching and communicating with their fast ;ngers. Many millennials, research
demonstrates, want fast answers to questions. They
expect and want you to engage in social media with
them because they crave making connections. Nearly
Continued on Page 82 >>