Recent surveys conducted by Wells Fargo, Ipsos Public (a global market research company) and Chase reveal that although many consumers think they know and understand the home buying and mortgage process, there is still quite a bit of misunderstanding (Unaware). They think they know, but they don’t know what they don’t know.
The good news is that the majority of those surveyed still believe in the American Dream of homeownership, think owning a home is something to proud of and that now is a good time to buy.
The bad news is that many believe they need a credit score near 780, at least a 20% down payment and are not fully aware of all the “closing costs” associated with the home purchase. Millennials are less knowledgeable than the general public, but their knowledge is increasing as they grow older. So much for the digital age!
Lenders have opportunities. There are people out there who want to buy, and think it’s a good time to buy, but think they won’t qualify.
Lenders, through marketing campaigns and/or by partnering with realtors, builders, community groups, local community colleges, and anyone who can help them, should bring their message to educate the public on how to buy and finance a home. There are buyers out there who would qualify for a low down payment conventional loan or an FHA-insured loan that, at present, believe they cannot buy a home. They need to be educated. Educate them and they will buy.
The lenders that find the ways to identify and educate these potential homebuyers will reap the rewards of more loans to qualified home buyers. It may be time to get back to doing pre-qualifications to help consumers and realtors. There are people out there who think they cannot afford a home. They may be misinformed. Inform them and you get more business. It’s that simple.
Times may be tough, and the new rules may make it a little more difficult, but as I’ve said it before, there are still a lot of people out there who want to own a home. That presents opportunity for lenders.
Those that see that opportunity and do something to take advantage of it will be those that benefit. The others will continue to stand on the sidelines, complain and wait for someone to do something to make it easier and bring the business to them.
Which are you?