How to Own the Home Buying Journey
Savvy members in today’s digital world are constantly pushing the financial industry to better meet their needs. With companies such as Amazon raising the bar through a variety of services and products, members now demand seamless user experiences and 24/7 access. What if Amazon started offering mortgages? It’s not as farfetched as it sounds—and if credit unions cannot meet the needs of tomorrow’s homebuyers, they will face stiff competition.
And the competition is not just technology giants like Amazon and other financial institutions with the money to put behind such efforts, but fintechs, and now the new kids on the block: fintech-powered community banks. Pairing community banks with fintech startups can be a powerful combination, especially when it comes to providing consumers with greater convenience and accessibility. Millennials are used to instantly comparing their options, and those looking for a new home will surely compare lenders based on their rates, convenience and flexible services. Credit unions must be prepared to support and engage their member throughout the entire homebuying process.
With mortgage rates still at historic lows, there are more individuals looking to purchase. Credit unions can take advantage of this and refresh their current mortgage lending practices with technology that will allow them to better compete in this market. Simply having a mortgage loan application on a website is not enough. Consumers, especially millennials looking for their first home, want an easily accessible digital experience similar to purchasing an item on Amazon. Of course, buying a home is more involved than that; it may be one of the biggest purchasing decisions of their lives. However, they fully believe that it should not be a difficult process.
How does this happen?
Traditionally, credit unions have only entered the member homebuying journey at the last step: application submission. With more prospective homeowners shopping for home loan pre-approval, credit unions need to enter the process earlier. However, this challenge is twofold: to gain first contact and then to own the member homebuying journey: from research to finding an agent, the house and finally making a purchase. By bridging the gap between home discovery and financing, credit unions can build deeper relationships with their members as well as guide them through what can often become a challenging process.
The homebuying process we once knew has changed over the years, due to the digital transformation that has occurred in our industry. Homebuyers rarely visit branches to discuss their mortgage needs, if they come in at all. The initial process has turned to online searches – especially for millennials, the new target market for homebuying. What this means is credit unions need to have the necessary technology in place to facilitate the all-online experience.
Recent articles and studies indicate that millennials will account for 80 percent of real estate transactions in the next decade. This generation expects an easy, end-to-end experience that’s digital-first and personalized to their needs. But the question remains: what can be done to bridge the gap between the lender and the real estate professional and the consumer, ensuring a seamless homebuying experience during the entire home purchase process? One study by Marqeta, a fintech startup, notes that millennials are typically less loyal to their primary financial institution than previous generations; 58% of millennials would consider switching to a new financial institution if Google, Amazon or Facebook entered the industry; and 45% would consider moving to an independent digital-only bank. Armed with this information, credit unions must determine what they can do to add value to their mortgage loan process, such as introductions to real estate professionals, personalized support and/or guidance in finding an affordable home.
How can this happen?
A credit union’s website is often the first place a prospective homebuyer will visit when comparing rates. Ensure the page is clear and easily accessible. Are there features to make your website stand out compared to competitors? If not, this is your chance to personalize a member’s digital house hunting experience. Rather than a flat page with static information that only has a listing of available loan officers or mortgage applications displayed, give them what they don’t yet know they want (and/or need). Provide a site that includes all the steps needed in the....-->
Savvy members in today’s digital world are constantly pushing the financial industry to better meet their needs. With companies such as Amazon raising the bar through a variety of services and products, members now demand seamless user experiences and 24/7 access. What if Amazon started offering mortgages? It’s not as farfetched as it sounds—and if credit unions cannot meet the needs of tomorrow’s homebuyers, they will face stiff competition.