During the early part of the nationwide shelter-at-home order, news spread across the industry about the historic surge of refinancing. It jumped to a record high of 55%, according to Ellie Mae’s Millennial Tracker. But as the weeks pass and the rates held fairly steady, that record has been demolished –with May seeing an increase of 65% in refinance applications.
And our clients confirm this incredible leap! Daily, we’re hearing that this refi boom has made it necessary to add a more comprehensive mortgage POS system to be able to streamline their refi applications.
Did you catch who is driving this refi trend?
That’s right. Millennials are driving the majority of the refinances. Considering that millennials also account for much of the force behind the nation’s economy, it’s worth looking into what this consumer group expects when shopping for a mortgage.
(Hint: a mortgage POS is a critical part of the solution).
Millennials and Refinancing in 2020
An Online Intro
We’ve said this countless times because we know it to be true. It all starts with a mortgage website. Online searches and comparison shopping is the norm for every purchase, and the same goes for shopping for mortgage help.
According to NAR’s 2020 Generational Trends Report, 92-93% of millennials use the internet as part to search for a home. Of those, nearly a quarter followed up that online search with one looking for a lender.
Don’t underestimate the power of an attractive, functional mortgage website. It’s often the first impression that convinces the millennial borrower to click through or click out.
User Experience and Guidance
Millennials surveyed admitted that one of the most challenging parts of the purchase is understanding the process. This bit of information matters as we all know that abandoned applications are a massive issue for all lenders, and one of the causes is consumer frustration.
Reduce the friction and incidence of incomplete applications by making the process easy to understand and non-threatening. An interview-style mortgage application that seems to “fill itself out” and is easy to navigate is just the thing to ease a millennial into completing the loan application.
Automation + Personal Service
Digital convenience is such a critical part of reaching millennial consumers. This fact cannot be overstated. However, there is a crucial element that nearly every software company overlooks –personal service. It is simply not enough to have a mortgage app, or online mortgage calculator, or document uploader.
It is a combination of those features + ease of use + personalized guidance that makes for a phenomenal mortgage experience. The kind of experience wins over a loyal customer and referrals!
That’s not all! Here are additional insights from the Fintech industry.
Millennial Banking Trends Reflect Best Lending Practices
- Millennial borrowers value mobile support, ease of use, and convenience of interacting with banks from a mobile device
- Millennial borrowers expect instantaneous actions— Think Uber, Amazon, OpenTable
- Millennial borrowers are likely to abandon mobile activities if they take too long
- Millennial borrowers have a higher use and comfortableness in using mobile banking apps than do other age groups
- Millennial borrowers are more receptive to communications received via mobile apps, texting, instant messages, and websites.
Are you giving your millennial borrower what they want? Or are you passing that borrower off to a competitor?