As we know, the housing market has been booming this year, due to lower mortgage rates and the “live and work from anywhere” trend, created by the pandemic.
Millennials are making up a significant percentage of new homebuyers — 38 percent, up from 32 percent in 2015.
But younger people are not the only consumers looking for cash for real estate. Boomers are also buying second homes, upgrading, refinancing, and moving.
Homes and real estate are not the only uses for borrowed money these days. Consumers are buying vehicles (specifically trucks and SUVs) and starting their own businesses. In fact, entrepreneurs launched 440K businesses in June 2021, a record high.
What Do These New Borrowers Want?
The obvious answer is “the cash they need, at an attractive rate, when they need it.”
But the decision of who to borrow from has become much more complex, and this is why and how lending institutions need to stay on top of trends and prepare themselves to meet the needs of today’s borrowers.
Savvy Borrowers Do Online Research
Although word-of-mouth recommendations (from real estate professionals, friends, family, and colleagues) still play a role in loan shopping behavior, digital shopping is now commonplace. In fact, 92 percent of first-time mortgage customers start their searches online.
Financial services companies must, therefore, learn to see the world through their prospective customers’ eyes. Start with the keywords that customers are using when they are searching for capital and make sure that your institution ranks highly.
Once those customers reach your website, can they easily find what they’re looking for? Fast loading speeds, simple navigation, and easily-found FAQs are no longer nice to have; they are essential.
And, of course, your copy should be consumer-friendly, clear, and compelling. Make sure you’re fully leveraging positive reviews and testimonials. Today’s consumer has more choices than ever before. Their impressions of your institution can be immediate — and long-lasting.
Service Quality is More Important Than Ever
The Need for Speed
As a lender, you must continually seek ways to demonstrate your efficiency to today’s borrowers. Especially when someone is buying a home or launching a new business, they are eager to close the deal and, because they have a range of borrowing options, will quickly go elsewhere if your institution can’t meet their needs rapidly.
In fact, brand loyalty continues to decline and consumers may no longer be wedded to a bank or other lending institution, but will simply go wherever they get the best deal, fast.
You can use technology to deliver faster decisions to borrowers. Rather than waiting for information from various sources, your institution (regardless of its size) can tap into a vast source of vital information. Using state-of-the-art AI, Lendsmart’s system can cut down approval time by weeks and even months, ensuring that you’re working from the latest and most accurate background data. Smaller banks, credit unions, and non-bank lenders can be even more nimble than traditional and larger financial institutions, which is critical to today’s consumer.
That technology means that your institution spends less time chasing after information and more time cultivating relationships with borrowers. When your employees are spending less time doing paperwork, they can focus more on business development and customer satisfaction.
You can also offer a one-stop-shopping experience to local prospects, recommending other related companies that add value to your borrowers’ lives.
A whopping 68 percent of people are willing to pay more to companies and services that offer exemplary customer service. And if you deliver a better, faster experience to borrowers they will be likely to recommend your institution to other qualified borrowers, ultimately increasing your short- and long-term revenue and minimizing lending risk.
One Truth is Timeless
Whether you’re extending capital to younger or older borrowers, for homes or businesses, you can be confident that Lendsmart’s platform and customization will give you the speed, accuracy, and customization you need to compete in today’s and tomorrow’s environment.
Needs and demographics may change and rates and housing inventory may fluctuate but customer service and accuracy will live on for centuries to come.