With an ‘all systems go’ announcement from the Fed to close out the year, brokers and originators across the country are planning for a 2021 that will still be defined by low rates, but may also feature the tailing off of the refinance boom. On the purchase side, too, 2020 saw a huge spike in first-time homebuying, largely driven by a millennial generation that preferred to rent post-2008, taking advantage of low rates to buy their first property. That spate of first-time homebuying should continue into 2021 and, as many brokers and originators pivot from refis to purchase, those younger buyers might be the key to keeping volume up.
To understand how mortgage pros can best capture that first-time homebuying market, MPA spoke with Yury Shraybman (pictured), mortgage broker and owner at Innovative Mortgage Brokers in Philadelphia. Shraybman explained that he approaches these clients as an educator and emotional support, rather than as a pushy salesman. He explained that by taking a gentler approach, mortgage professionals can secure their deal, put their client in the right mortgage, and generate a steady stream of repeat business.
“As a broker, I don’t really consider myself to be a salesperson, I consider myself to be more of a teacher and a consultant,” Shraybman said. “With first time homebuyers, this is a huge purchase, probably the biggest transaction of their life. There has to be a lot of hand holding involved - that’s where I come in with my knowledge and experience and I take them through this process and try to make it as smooth as possible.”
Read more: First-time homebuyer purchase activity races to record high in Q3
Shraybman stressed the different loans he keeps on his product shelf as key to capturing those buyers. Through conventional products, or government-backed programs like FHA loans, he can find a fit for a new homebuyer’s particular credit score, debt to income ratio, and down payment. He doesn’t push so much as counsel, because he wants to avoid two key risks. The first is losing the client altogether, put off by a pushy salesperson. The second, which Shraybman believes is an even worse outcome, is he can put a borrower in the wrong program, something that doesn’t suit them and that they’d be stuck with potentially for decades.
Shraybman takes this empathetic approach because he knows the emotional turmoil a first-time homebuyer goes through. He often tells the story of receiving a statement from his own mortgage company telling him his monthly mortgage payment was going up by $250 per month. Right away, he said, emotions kicked in and Shraybman was asking what the hell was going on. Of course, as a mortgage professional, he quickly did his due diligence and saw the payment increase was due to an insurance premium and tax increase. But what if he wasn’t an expert? For an ordinary person, receiving that notice could cause real uncertainty and hurt. Ensuring that these emotions and expectations are managed is a key part of Shraybman’s approach to first-time buyers.
Read more: What did we learn from the Fed announcement?
He doesn’t hold these new clients’ hand purely out of altruism, though. Shraybman sees a serious ROI in serving these clients well as they become a regular source of repeat purchase and refinance business for him. He believes this empathetic touch is an approach many mortgage pros would benefit from taking when working with first-time homebuyers.
“A lot of mortgage professionals, they’re looking at their pipeline as a kind of assembly line and all of those loans are just regular transactional deals with no emotions attached. As a loan officer, you need to understand that this is the biggest purchase your client has ever made,” Shraybman said. “It’s all about just being a good person and with all the first-time homebuyers coming into the market, approaching them that way would help your business tremendously.”