Becoming a Go-to Lender for First-Time Homebuyers

The first-time homebuyer market continues to grow, even as the home market as a whole continues to struggle.

Family looks down the path to homeownership.

Credit unions targeting first-time homebuyers have the opportunity to increase their lending portfolio dramatically. By welcoming first-time homebuyers into your credit union, you open the doors to a market that continues to grow, even as the home market as a whole continues to struggle.

When you are open to this demographic, you’ll need to do more than send out notices to existing members and allot a small marketing budget to the endeavor. Home buying seminars and other events that benefit both your credit union and the consumer are a must.

Hosting first-time homebuyer seminars and opening your doors to this market will almost certainly result in improvements within your mortgage department. Before you know it, you’ll be busy accepting preapproval applications and purchase agreements as people begin to buy their homes with the knowledge you provided.

First-Time Homebuyer Seminars

Hosting home-buying seminars is an excellent way for credit unions to educate and connect with locals while generating new business. It doesn’t get much better than a room full of people who need exactly what you’re offering.

Many credit unions overlook this diverse approach to lending portfolio growth, but yours doesn’t need to be one of them.

New homebuyers have a lot of questions, and they don’t know who to turn to for answers. Common questions they might have include:

Hosting home buying seminars for first-timers allows you to answer these questions in an educational group setting. The best part? Everyone gets something out of it.

Attendees get to have their questions answered by a live person. The agent leading the event gets to share their expertise. And the credit union hosting the event gets to bring in new members.

What Documents Will First-Time Homebuyers Need?

From state and federal documents to contractual documents, first-time homebuyers will need a plethora of paperwork before the sale is complete. Below is an abbreviated list of critical documents required for homebuyers:

The amount of paperwork involved with the purchase of a home can be dizzying to all but the most experienced professionals. Different types of home loans will require varying paperwork. Though not everything on the list above is your responsibility, that doesn’t mean buyers won’t bring it into your branch for assistance.

Paperwork is made to be even more confusing by the range of formats, servers and applications used industrywide. This might be one of the pain points that scares other credit unions off from catering to first-time homebuyers, but it doesn’t need to.

Working with a forms provider allows your credit union to make the process easier and integrate the mass of documents effortlessly into your system. Such services make the process simpler online, in person, on apps and even over the phone. What’s more, these servicers don’t need access to your data, which protects your members from increased privacy risks.

Marketing Your CU as a Leader in First-Time Home Buying

Becoming a leader in the chronically oversaturated digital age isn’t as easy as placing a couple of ads. Your credit union must establish itself as a trustworthy leader to first-time homebuyers with engagement and interaction.

While seminars discussed earlier are an excellent example of this useful tactic, webinars can work as well. When locals come to know your location as a reliable source of information and personalized answers, word can spread quickly. This level of “thought leadership” can even result in experts from your organization speaking at larger conferences, and building a network in your local home-buying industry.

A strong network that supports other professionals involved in the first-time home buying process is an invaluable element that can help direct consumers your way. This type of professional recommendation solidifies your status in your community as a leading provider of loans for first-time homebuyers.

When you pair thought leadership and networking with internet marketing, review management, member outreach and a regular online presence, you’ll reach a larger audience of potential borrowers.

First-Time Homebuyers in 2019

According to NerdWallet’s 2019 Home Buyer Report, 42% of American survey participants said they feel more optimistic about their ability to buy a home in 2019 compared to 2018. In December 2017, just 28% of homebuyers shared that sentiment.

An equally impressive 44% of American survey participants said today’s economic and political climate makes them more likely to purchase a home in the next year. In 2018, just 35% of participants shared this sentiment.

With the steadily rising home values and the shortages in rental units, first-time buyers have been jumping right into the housing market for some time now. In fact, for the third quarter of 2017, Genworth Mortgage Insurance reported that 601,000 homes were purchased. First-timers bought a whopping 40% of all single-family homes sold and 56% of all purchase mortgages.

Overall, Genworth reported that “the first-time homebuyer market has been more resilient during the slowdown compared to repeat buyers.”

Making the Process Fast for First-Timers

Lending is probably the most relevant job any credit union faces, and the more streamlined you make it, the more popular your institution will become. First-time homebuyers are often overwhelmed and feel like they’re in a hurry to get into their homes, and the faster you can make the process, the better.

With a genuinely efficient service designed to manage all documents and paperwork within a secure system, you can expedite the home-buying process without sacrificing privacy or security. These services make the process faster internally, too, by reducing the amount of training your employees will have to undergo before you launch new offerings to first-time homebuyers.

Richard Gallagher

Richard Gallagher is CEO of Oak Tree Business Systems, Inc. He can be reached at 800-537-9598 or clientservices@oaktreebiz.com.

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