How to prepare our future for financial success?

How should we be preparing our future Millennial clients for successful real estate purchases and financing approvals?

Millennials (those under the age of 34) make up many of our current and potential home buyers/financing applicants.  With this in mind it is of great value for us all to learn more about their attitudes about homeownership and future investments and how we can help prepare them for success. Here are some trends among Millennials: -The National Association of Realtors Trend Study of 2014 found “8 out of 10 recent buyers considered their home purchase a good financial investment, ranging from 87 percent for buyers age 33 and younger, to 74 percent for buyers 68 and older.” -Lawrence Yun, the Chief Economist and Senior Vice President of Research at the National Association of Realtors, said the Millennial generation, which is under the age of 34, is now entering the peak period in which people typically buy a first home. “Given that Millennials are the largest generation in history after the baby boomers, it means there is a potential for strong underlying demand. Moreover, their aspiration and the long-term investment aspect to owning a home remain solid among young people,” he said.  “However, the challenges of tight credit, limited inventory, eroding affordability and high debt loads have limited the capacity of young people to own.” -Although Millennials have a much greater talent for navigating technology and social media, they are far from educated about credit and scoring.  The Fourth Annual Credit Score Knowledge Survey done by the Consumer Federation of America found that this generation falls short in credit knowledge.  About half of Millennials surveyed never pulled a copy of their free annual credit reports whereas with older adults, about 80% use free annual reports to view and learn about their credit.   When individuals are unaware of what is on their credit profile it is less likely they will have a curiosity about how credit works.  Many Millennials do not even know what kind of information is posted on credit profiles or how scores are tabulated. How can we help these individuals & gain referrals? We can send information relating to Millennials to our referral sources as well as our current, potential, and past clients.  This information will be really valuable to Millennials and also help us gain them as loyal customers in the future. For referral sources, they will appreciate good quality info that they can use to enhance their reputation and gain referrals and trust.  In addition, our current customer base will appreciate our interest in helping those they care for, which will give us an opportunity to expand our business and build a great reputation. Here are tips on credit and scoring to share with Millennials: -Order your free Experian, Trans Union, & Equifax credit reports once a year at www.annualcreditreport.com and learn about what is on your credit reports. -If you purchase the scores offered on the annual site understand they differ from FICO scores.  FICO scores are the scores used by most lenders to evaluate a borrower’s ability to pay back loans. -FICO scores can be purchased at www.myfico.com. -Paying a credit card, car loan/lease, student loan, store card, mortgage, or overdraft protection late can drop credit scores hundreds of points no matter how small the amount owed is. -Starting to build credit at a young age can add many points to your scores as the credit ages. -FICO scores over a 680 could save many mortgage applicants $100,000 or more over the life of a mortgage loan depending on the size and type of mortgage.  A 740 FICO score and above is considered excellent credit. -Credit scores take time to build and improve so starting early is extremely important. -Co-signing or signing for a friend or loved one’s cell phone, credit card, lease or loan can extremely damage credit scores for years to come and alter your ability to get loan approvals. If you have no control over paying the bill or are not comfortable paying the debt if it defaults do not sign up for it.  -Being added on as an authorized user to a parent or trusted friends old credit card with an excellent payment history can add points to scores since it increases the average age of credit.  Beware of being added on to maxed out cards. ​ Feel free to reach out to us at 877-292-0656 f you have any credit questions or reports you would like reviewed!