Plenty of challenges remain for this buyer cohort – but their enthusiasm for homebuying remains undimmed
Younger homebuyers entering the housing market for the first time are looking for a quick, easy mortgage process, and aren’t afraid to use the latest technologies to make that happen, according to one mortgage broker.
At a time when homeownership rates have stalled among Gen Z and millennials, mortgage brokers and loan officers are seeking new ways to simplify the process for young buyers.
Paul Leara (pictured top), a mortgage broker and owner of Mountain Mortgage LLC in Birmingham, Alabama, said that younger buyers appreciate both the speed of the process and the simplicity of communication.
“Everybody, especially younger clients, loves convenience,” Leara told Mortgage Professional America. “They love speed, and they want more singular communication. They don't want 50 different places, emails, texts, calls, pings, all this stuff. They just want one place, if possible.”
Leara is developing a new app to further simplify the process. In the meantime, he utilizes a service called Fast Pass to make the homebuying process as hands-off as possible.
“Fast Pass is a home-buying service,” Leara said. “It's like a done-for-you service. It’s great for busy families or young people who might have less time on their hands, might have a little bit more money, and might want more of a stress-free move-in.”
The service aims to obtain all the necessary documentation early in the process, so Leara will know exactly what conditions may be required to close the deal. The goal is to avoid any last-minute surprises, Leara said. It also helps homebuyers prepare for everything they will need once they sign the mortgage.
“We will pay for their house cleaning before they move in,” Leara said. “We'll help negotiate cleaners and arrange movers. We'll help them transfer utilities, all the other tech stuff involved with buying and moving. That’s the main idea. If you don't have the time, energy, or focus to handle all this, and you want a hands-free, stress-free purchase and move-in, then that's what it's for.”
AI making its way into the mortgage broker’s toolbox
Artificial intelligence (AI) is already working its way into the mortgage industry. Damon Germanides (pictured below), a mortgage broker and co-founder of Insignia Mortgage, has spent time researching how AI will help brokers in the future.
“AI is a big issue,” Germanides told MPA. “It’s going to be a big thing for efficiencies and top of the funnel. It can create a scrubber or an assistant. It can double-check work for you. You can feed it your guidelines of what you’re looking for. It can help you follow up. There are a lot of potential benefits.”
While larger brokers may be able to leverage AI technologies, Germanides believes smaller banks may be priced out due to the initial cost of the technology. As with AI in all industries, Germanides said it is essential to establish guardrails to ensure the technology is used in an ethical and legal manner. However, for the most qualified borrowers, it could significantly expedite the mortgage process.
“I’m actually excited for AI, because it can help us do a better job for our customers,” Germanides said. “There’s an argument to be made that on a very easy loan with a W2 borrower who’s been employed, who has excellent credit and good bank statements, he should be able to go on to a UWM site and pick his product and close his loan. He may not need much nurturing.”
For borrowers with more complex loans, the AI may not be able to guide them through the process. Either way, Germanides believes that brokers will still be both needed and preferred by borrowers throughout the process.
“People are still going to want the human touch throughout the process,” Germanides said. “They still want someone to talk to them through the loan. AI is not going to be able to replace that. AI isn’t going to be able to handle a situation where a person is making money on one business but losing it on another, or a scenario where a person has a sister who is giving them money. There are a lot of scenarios.”
Many companies are increasing the use of AI in the mortgage process. Better Home & Finance Holding Company reported growth in the fourth quarter of 2024, driven by advancements in AI-driven technologies.
Stacia Weishaar of Delightful Refuge highlights that consumers expect instant service, urging originators to adopt AI-powered underwriting, blockchain, and predictive analytics for improved efficiency and customer experiences. https://t.co/z84ggmJwlw#MortgageTech #Innovation
— Mortgage Professional America Magazine (@MPAMagazineUS) December 3, 2024
“Talk to them in their language”
One way to learn how to reach younger buyers is to be able to relate to them. To do that, Leara turned to TikTok late last year.
Leara was certainly one person happy to hear that President Trump is extending the deadline for the sale of TikTok by another 45 days. The Chinese-owned social media could be banned in the United States if a buyer is not found.
Started in December, Leara’s account, @homeloanhero_, has nearly 40,000 followers, and his posts have garnered more than 660,000 likes.
“The plan is to try to grow the biggest brand I can online,” Leara said. “If you build an online brand, young people, especially Gen Z, will associate that with more authority and more trust. Plus, you see what the trends are. You see what is happening, and then you talk to them in their own language.
“I’m not going to be out here doing dances. I think it’s about being honest and talking to them, relating to what they’re going through, since I’m not that far removed from Gen Z.”
His advice to small brokers and bankers looking to appeal to the younger generation is to make the process as smooth and as easy as possible.
“If you’re at a bank, you need to have great technology and an easy process, which is not easy to have control over at a bank,” Leara said. “I used to be at a bank, and I understand how all that works. Banks can be very rigid. “Mortgages are complicated, and you can’t get rid of the steps, but you can make it easier.”
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