Crop close up of female tenant renter show praise house keys moving to first own new apartment or house, happy woman owner buy purchase home, relocate to dwelling, rental, rent, ownership concept

As the economy recovers from the pandemic, residential lending continues to be a key growth driver. While home price appreciation remains positive, the rocketship growth trajectory of early 2020 may be elusive this year. Additionally, refinancing burnout may become more obvious as the demand percentage shifts to purchase transactions. 

The State of Mortgage Lending in 2021

Real estate fundamentals continue to be supported by a combination of demographic trends, limited inventory, and what continues to be historically low-interest rates. In addition, pent-up demand from the pandemic period and the need for more living space to accommodate work-from-home setups means that the demand for single-family housing will continue to grow. Residential mortgage originations touched $4 trillion in 2020, and forecasts for 2021 from Fannie Mae, Freddie Mac, and the Mortgage Bankers Association all exceed $3 trillion, driven by the low prevailing mortgage rates.

Given the circumstances, it would be interesting to see how the mortgage and lending industry will drive growth. Particularly, the channels that will drive growth in 2021.

According to the National Association of Realtors, millennial buyers 22 to 30 years (Younger Millennials) and buyers 31 to 40 years (Older Millennials) continue to make up the largest share of home buyers at 37%.

Now, with millennials positioned to be the single largest group “shopping for mortgages,” decoding the buyer’s journey will be key for mortgage lenders to tap into this lucrative demographic. Firms that can tailor their new customer acquisition strategies to align with the buying behavior of this demographic will develop a competitive advantage.

Mortgages for Millennials: How to Succeed in 2021

Millennial mortgage shoppers increasingly rely on peer-review platforms and technology to inform their buying choices. Where their parents and grandparents relied on trusted, known sources for mortgages and loans, millennials today begin their search on the internet. They use both traditional and voice searches to find both potential lenders and real estate agents.

A flowchart depicting the step-by-step journey of a millennial home buyer
The millennial purchase journey for mortgages

The “Amazon” generation is also far more likely to compare options online and validate reputation including ease and price using “online reviews”. In fact, estimates suggest that 90% of new prospective homebuyers will use online resources to research homes and the mortgage process before they speak to a real estate agent, mortgage broker, or lender.

Clearly, millennials have changed the way prospective home buyers journey through the home buying and real estate financing process.

So, how can lenders then respond to millennials’ changing purchase journey?

Step #1: Be in the Right Place

Any effort to improve discoverability will require lenders to optimize their digital presence. One of the most effective ways of achieving this is to ensure that your business profiles are claimed and updated on a regular basis on both general platforms such as Google and Facebook but also on niche platforms and directories such as Zillow and Trulia

Step #2: Ensure Digital Profiles are Complete and Comprehensive

A digital profile refers to the information available on profile platforms, review sites, or directories. If you have been in business for a couple of years, it is likely that your digital profile already exists.

Sometimes what can be worse than not having a digital profile online is having an unclaimed profile that you cannot control.

The first step should be to claim the profile and take control of the content on the profile. For lenders these are some important information that must be available on these profiles

  • Book an appointment with a Mortgage Broker
  • Business Hours
  • Begin your Application Online 
  • Reviews and Ratings
  • Short Company Overview
  • Link to Company website
  • Links to Mortgage Guides and Resources
  • Mortgage Products and Rates
  • Home Affordability Tool
  • Mortgage Calculator
  • Mortgage FAQ’s

Millennial home buyers and mortgage finance seekers expect transparency and information at their fingertips and if a lender can provide that deep level of information on their digital profiles, it dramatically improves the likelihood of mortgage shoppers engaging with the lender whom they’ve discovered online.

Step #3: Use Social Proof to Build Trust

A screenshot of Lendmark financial's GMB profile
Leading mortgage lenders convert prospects using social proof

Another distinct behavior pattern of millennials is their familiarity and dependency on social proof. For a generation that makes product and service purchase decisions based on comparisons, it is key that they have insights into what other customers are saying about a brand, product or service. The best way to build trust is via social proof and there is no better social proof than customer reviews and ratings. A mortgage decision is often one of the biggest and most expensive decisions and mortgage shoppers aren’t impulsive buyers in this case. Lenders should find a way to ask for and respond to reviews that display they are a great mortgage company to do business with. The ability to view and respond to reviews quickly and comprehensively increases trust and transparency multifold and is a great way to attract new customers. 

Succeeding with Mortgage Marketing in 2021 and Beyond

With digital profiles, mortgage lenders can improve their search ranking and appear in online searches higher up, especially for local business searches. That said, company information within digital profiles should be comprehensive to engage the millennial mortgage shopper who is looking at digital information sources that are deep and all-inclusive. 

Secondly, digital profiles should be complete so let’s say If potential customers want to contact you they can do it seamlessly and conveniently 

Finally, mortgage lenders should not only provide options for past customers to share their feedback through reviews and ratings but should be quick to respond to them, building trust in the minds of future customers who are looking for transparency and social proof of a reputable brand to engage with. 

Ensuring accurate information is available across multiple platforms can be challenging and time-consuming. Using a digital profile management solution can reduce time requirements while providing data-driven insights into your online presence. If you’re ready to improve your brand awareness and increase your customer base, speak to us to ensure that your business is not only listed but also found.

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