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First-Time Buyer Program – Start by Asking the Right Questions

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BY ED SWANSON

First-Time Buyers (FTBs) represent a very lucrative, yet potentially risky portion of your membership. Credit unions can position themselves for long-term success by implementing proven strategies for FTBs. The key, like with many things in life, is to start off by asking the right questions:

  • Are their parent’s members? The majority of your FTBs are younger, so it would help to know something about their family history.
  • Do they rent or live with parents? What is their payment history with any landlords?
  • What is their motivation?
  • Is this the first car they’ve ever purchased from a dealer?
  • Do they know or did they look up the value of the vehicle they are buying?
  • Do they have a commitment for the insurance?
  • Do they know the cost of the insurance?
  • Where is their checking and savings accounts?
  • How much money have they saved to put down?
  • What is their level of education?
  • How did they get their last job?
  • What is their performance evaluation?
  • Do they like their job and what are their future prospects there?

A good interview is absolutely essential – you want to get to know these members.  It takes a little more time, but it can mean the difference between having a profitable long-term relationship vs losing money on a bad loan. (LSCI has developed a special First-Time Buyer checklist, which you can see a snapshot of on the next page).

In addition to asking the above questions, it’s important to establish and follow guidelines for FTBs. LSCI recommends the following:

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