Most taking the survey indicated that their student loans were/are the biggest deterrent to taking this big financial step.
This should come as no big surprise. The difficulties surrounding student loan debt have been in the spotlight (and hot-seat) for a long time now.
Now it's true that some mortgage programs exist and can be of assistance to those facing student loan challenge. Unfortunately, even with this program available, many Millennials still feel that their student loan debt is insurmountable and that sentiment is keeping them from pursuing homeownership.
It must be pointed out here: The LendEDU survey also indicated that student loan debt isn't the only financial hurdle that Millennials feel they are facing.
Credit Card debt, building better credit scores, building savings, building an emergency account, and retirement savings ... each was reported in large measure as major concerns. There were also other "contributors" too.
It's reported within the survey that:
- A lack of knowledge
- Inadequate financing education
- Misconceptions regarding financing requirements
- Misconceptions regarding the mortgage process itself
Now there is little an individual Loan Officer can do to address the type or number of loan programs available for borrowers. That is largely left to government entities and the Private Sector that makes Home Loans.
However, there IS much Loan Officers can do to address the lack of knowledge, level of financing education, or misconceptions held by Millennials. And that is why I write this article.
So what are those financing/credit issues pinpointed and detailed by the LendEDU survey (and other surveys) as troublesome?
- Credit Score requirements
- How Credit Scores are utilized by Lenders
- Checking Credit Report will hurt Credit Scores
- That married couples have ONE/combined credit scores
- Down Payment requirements and guidelines
- Closing Costs involved in Mortgage financing
- Time/Days of Average Mortgage Process
- Info pertaining to Debt-to-Income Ratios
- Gift Monies
- That Pre-Qualification = Pre-Approval
- That Interest Rates are the only measurement of Mortgage costs
- That all debt is weighted equally
- More ...
I think you get my drift. There are just way too many facets of the mortgage process and its requirements that current hopeful Millennial buyers do not understand, have wrong, or at a minimum ... misunderstand.
Again, addressing THAT issue is something I and other Loan Officers can do something about by offering educational opportunities and information. But to a large part, we can only do that if those hoping to buy reach out and ask questions.
Why is this personal touch ... this in-depth conversation between LO and hopeful home buyer so very important?
Increasingly, mortgages and mortgage approvals are tethered and tailored to the applicant's personal finances, credit scores, and needs. Comparisons cannot be made between applicants as their financial and credit backgrounds ... their needs ... are always different. Mortgage decisions made by client and LO are based on facts and figures intensely personal to the individual mortgage applicant.
So the only way to receive the answers needed to make an informed financing and home buying decision is to talk to a lender. Then and only then can we provide the facts and the knowledge needed to assist ... whether that be in the infancy of their home buying journey or somewhere along its path.
52% of those Millennials surveyed by LendEDU indicated that they preferred that this type of assistance and initial conversation with a lender be held in-person. But whether it be conducted one-on-one or via another method, it is the first step and the most reliable step a hopeful home buyer/borrower should and can make.
Millennials should not leave such an important decision regarding their future to chance. The opportunity to ask questions, educate themselves and gain valuable information personal to their individual finances exists and all is easily attainable.
Reach out and talk to me or your local lender today ...
I'm easily found at:
Mortgage Originator - NMLS #216987 - IL Lic. #031.0006220 - WI License #216987