Although millennials hope to own a home one day, many say the down payment is their biggest barrier when it comes to purchasing one, according to the latest Country Financial Security Index^.

Fully forty-six percent of millennials and forty percent of Americans overall cited affording a down payment as the greatest financial barrier to homeownership, with the second most cited reason for Americans overall being that rent is more affordable (18 percent).

"Purchasing a home is much more than paying for a place to live; it's a major investment of both time and money," said Doyle Williams, an executive vice president at Country Financial. "Homebuyers should look beyond the initial cost of the down payment to the expenses of maintaining and protecting a home before making the investment. Some may not think it's worth the cost and effort at this time in their lives, but for many, owning a home is worthwhile."

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Although the down payment continues to be a barrier for most Americans, it's not stopping them from purchasing a home. In fact, many Americans reported making small down payments to afford their homes.

More than half of Americans (54 percent) reported putting down 10 percent or less of their mortgage loan on a new home purchase, while one in three (36 percent) said they put five percent or less of their mortgage loan on their down payment.

When it comes to age, millennials are the most eager homebuyers of the bunch. They are even the most likely to purchase a home in the next one to two years when compared with other age groups: 18-34 (21 percent), 35-49 (6 percent), 50-64 (6 percent), or 65 and older (5 percent).

If given $25,000 tomorrow, more millennials (26 percent) would rather put this newfound money toward a down payment for a new home or pay off a mortgage than use it to pay off their credit card debts (17 percent) or student loan debts (16 percent). By contrast, most Americans between the ages of 35-49 would rather pay off their credit card debt (33 percent) or invest it (20 percent).

While buying a home is a priority for millennials, other age groups have different concerns. Most Americans aged 35-49 selected paying off debt (67 percent) as their greatest priority, while those aged 50-64 selected retiring (72 percent). For the majority of Americans overall, paying off debt is a top concern.

Home ownership is a top priority for most millennials, but the stark reality is that two-thirds of homeowners are still working to pay off their mortgages.

Eleven percent of Americans say that 40 percent or more of their salary goes toward their monthly mortgage payments, while one in five American renters (21 percent) claim to spend 40 percent or more of their salary on rent.

Almost half of American renters (47 percent) say they believe a mortgage payment would be less expensive than their rent, but 24 percent admit they have no plans to purchase a home within the next four years. This discrepancy potentially stems from half of Americans thinking it would take four or more years to save up for a down payment.

Country Financial's Security Index also found that many Americans are working to pay off their mortgage into retirement age. In fact, more than one in three Americans are still doing so after they turn 65 years old (33 percent). Nearly seven in 10 Americans ages 50-64 are paying off a mortgage (68 percent), and eight in 10 Americans ages 49 or younger are as well.

"It's important for those nearing retirement to consider how much home they need for their lifestyle, and how much maintenance they're willing to take on," continued Williams.

Nonetheless, only about six percent of American homeowners regret or somewhat regret purchasing a home, suggesting that despite the extensive time it can take to pay off a mortgage, Americans still feel that it is a worthwhile investment.

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By Pat Sherlock

I just watched the Oscar and BAFTA award-winning documentary "Free Solo" which follows Alex Honnold as he climbs Yosemite's El Capitan, a 3,000-foot granite monolith, without ropes.

This is an incredible story as Honnold becomes the first person ever to accomplish the feat. The film is breathtaking and gives viewers the feeling that you are actually climbing with him. The beauty and danger of El Capitan is on full display.

[caption id="attachment_9789" align="alignleft" width="266"] Sherlock: The best students are successful originators who want to improve their skills.[/caption]

You cannot watch the documentary without being overwhelmed by his achievement. But, what struck me most about Honnold's story is the intense preparation and practice he put in before attempting to scale the wall. Honnold analyzed the climb in great depth. He kept a journal of his observations, visualized what he was going to do and then practiced scaling the wall with ropes.

He fell many times during the practice sessions which says something about his courage. In my view, the most interesting part was that he didn't wing it. I believe there is an important lesson here for those of us in mortgage banking.

Although Honnold is known as one of the world's best free solo climbers, he was smart enough to practice deliberately. His practice sessions went on for months because he knew that one mistake on the wall and he would be dead.

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Obviously, in a life-and-death matter one would expect that anyone would be as diligent as he was; but as we often see, that is not always the case. Honnold's challenge was to align his thinking with his muscles to execute unconsciously during his scaling of El Capitan.

Mastering difficult techniques until they become second nature isn't easy, but it is what above-average originators do to win in today's marketplace. For top producers, succeeding in origination is their own version of climbing El Capitan. I know from conducting sales training for many years, the best students are always the most successful originators who still want to get better. These individuals work hard, ask the best questions, practice their new skills and implement what they have been taught.

In my recent sales training program on social media and lead generation, it was the top producers who used the new information quickly and applied it to their business models. They did not argue that social media is bad as low-performing originators often do.

Instead, the top producers recognized that first-time home buyers and referral sources are using social media platforms more frequently and that using these communication tools in their prospecting efforts is imperative if they want to be successful.

Originators who resist the new selling methods will inevitably be left behind and before they realize it, they also will be out of a job. The reason is simple: Lenders will no longer be able to afford to carry them.

It is clear to me that mortgage banking is at a crossroads where costs are high and production is difficult. Every day I speak with lenders and hear the same things about how business is really hard with many firms conducting price wars.

The reasons why this has happened can be debated, but the reality is that mortgage banking firms must scale the "granite wall" or cease to exist. This isn't gloom and doom, but simply a fact that companies must reinvent themselves to stay competitive. This takes hard work and encompasses installing perpetual change in their culture and implementing changes with a disciplined approach.

Yes, it is a tough environment. Managers who once held high-level positions are now realizing that there are not a lot of these jobs available today. Many hold on to the status quo hoping they can weather the storm. The same goes for originators and back-office personnel.

But the good news is as an industry, below-average performing companies and vendors will be replaced by firms that are innovative in their marketing and processes. We are already seeing some real innovation: Chase is guaranteeing to close a loan in 21 days. Hopefully soon, some other lender will guarantee 10 days for all loans. It is clear that new ideas are needed in the industry and not just the traditional response of taking on greater credit risk to generate business. We have seen what happens when that is the dominant strategy.

We need, instead, more managers and originators who are willing to deliberately practice new selling techniques.

About the Author: Pat Sherlock is the founder of QFS Sales Solutions, an organization that help sales organizations improve their sales talent management and performance. For more information, visit https://patsherlock.com

 

 

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By Dave Hershman

Question:  I am the manager of a mid-size office with multiple loan officers. I have multiple areas of responsibility as a manager and each could be a full-time job.  I jump from task to task each day but end up in the same spot the next day.  How can I lessen my stress and be more productive?--Kevin from Ohio

For anyone who has too many tasks to undertake and not enough time to accomplish these tasks, there are two choices:

• Prioritize the tasks: A great leader must decide what is important and focus upon these tasks.
  Other tasks should be delegated to others, postponed or eliminated.
• Use synergy: If you want to get more done in less time, you need to find a way to achieve more that one goal with the same activity. The implementation of synergistic principals will not only increase productivity, but it will also help lessen the stress of manager.

There are seven rules of maximum synergy.

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These rules will help managers achieve more with less time, energy and money.  Loan officers will also benefit from the use of these principals. Managers who are efficient in using these concepts will be more effective as mentors to their team, as well as recruiters.

1. Everything you do must have a second objective.
2. If you are marketing by yourself—you are wasting synergy.
3. Some targets are more effective than others.
4. Some tools are more effective than others.
5. Everything you do can be made more effective through additional doses of synergy.
6. Do not market without a response mechanism.
7. Do not market unless you are delivering value.

Our industry has a tremendous number of managers.  What we need is more leadership. The use of synergy will help you get there.

About the Author: Dave Hershman is a VP of Sales for Weichert Financial Services and founder of OriginationPro (www.OriginationPro.com), providing marketing content and training programs for the industry. Email him with “Ask the Mortgage Management Expert” questions or comments at This email address is being protected from spambots. You need JavaScript enabled to view it.

 

 

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