April 15, 2019
What Do Millennials Look for in a Home Loan?
Though they have recently become the generational group buying the highest number of homes, Millennials have faced a number of unprecedented challenges to becoming homeowners at what has traditionally been considered the normal stage of life in which people generally take that plunge, resulting in a lower level of commitment from this generation than from any of the living generations preceding them. Some of these challenges—such as the unparalleled amount of student loan debt and the timing of the so-called Great Recession—have been imposed externally; some of them, on the other hand, have resulted from large-scale misinterpretations of existing standards on their part—like the widespread belief that one must have 20 percent to put down on a home, when in fact there are numerous loan options available that do not require such a sizeable chunk of money; and the misconception that it is better to save up and aim to make one’s first home purchase a dream home rather than settling for a starter home at first, from which to build equity and move on later in life. Meanwhile, this generation has seen technology move into daily life like never before, and has come to expect certain availability from the services aimed at them. This has resulted in their desiring different provisions in a home loan.
For example, Millennials expect there to be online accessibility to home loan originations, and digital components such as bank statements and credit card information, they believe, should be able to be compiled paperlessly. Communication should be multi-faceted: phone, email, text. Simultaneoulsly, they want to be able to put their filling out of an application on hold and reach out to a bank officer to ask questions and clear up any confusion they may have about the process.
That said, a survey performed by Ellie Mae has revealed that the most important factor to Millennials in deciding on a home loan is not simple convenient accessibility, but rather security. They saw the effects of the Great Recession—it was a formative memory—and it has made them wary. This has made them yearn for speed in processing and in-person interaction. Indeed, more than online resources, this cohort is seeking out advice of friends and family, real estate agents, and lenders. And they are more likely to seek out funding from a lender before they find a real estate agent, turning the old model on its head.
Meanwhile, security in home buying is something that can only be assured by a solid title search and a policy of title insurance to match it. Topouzis & Associates, P.C. is here to act as a bulwark against title problems initiated in the past. We do title searches and ensure a buyer is gaining clear title to their new property—and we back our services with offerings of title insurance (click here), in case someone along the line of ownership did something that will weaken title at some point in the future.