Recent data from the GSE shows that Hispanics are currently the leading demographic in the housing market. Over the past decade, more and more Hispanics have come to own their own home in the United States, as the number of homeowners for the group doubled by 59% from 2000 to 2013.
And by 2025, Hispanics are expected to account for up to 40% of all new households, according to forecasts based on data from the Harvard Center for Housing Studies and the U.S. Census Bureau.
Edgar Santiago, a senior mortgage loan consultant at Inlanta Mortgage, says in the last year, the amount of Hispanic borrowers he has almost doubled. “In the last five years, my business has probably been around 50/50, but during the last year, the Hispanic market has really jumped back.” He adds that his current volume is about 98% Hispanic.
To appeal to this demographic, Santiago says mortgage professional
s need to be aware and knowledgeable of the Hispanic culture. He notes that the group is relationship based and the sales cycles tend to be much longer.
Below are three ways to help you appeal to Hispanic borrowers.
Know your client.
According to Santiago and Freddie Mac, Hispanic homeowners are a prideful group of people, who not only have an apparent desire for the chance to own a home, but also the roots of building families on strong foundations.
Santiago says the demographic looks for homes near businesses, their local church and their families. Also a majority of them also still prefer face-to-face communication. “They like looking you in the eye,” he says. “But, they are also using more technology, particularly the second generation coming up.”
Build relationships – and in turn, get more referrals.
“People do business with people they like,” says Santiago. “Hispanics are deeply rooted with people they like and referrals carry a lot of weight.” He adds that 30% of his business comes from customer referral, while 70% comes from local realtors.
Mortgage professionals should also expect to talk to several people before the deal closes, says Santiago. The demographic looks heavily to close families and friends for approval.
Income and lack of credit education are big issues.
Santiago says the biggest challenges Hispanic home buyers face today is income stability and lack of credit education. “Sometimes they don’t make enough money, or they have seasonal jobs.”
He also adds that credit education is also a huge issue. Santiago finds that most of the demographic does not know how to improve their credit scores.
Freddie Mac is working closely with housing counselors, nonprofits and other organizations to help provide financial education, pre-purchase counseling and down payment and closing cost assistance to Hispanics.
With their population expected to more than double to about 128 million by 2060, Hispanics are likely to drive future U.S. housing demand, according to Freddie Mac.