Home Equity Lending: Millennials and Credit Union Member Experience Innovations

January 29, 2024 Sarah Cooke

By Patrick Troppe, VP Strategic Development, ValueCheck

Marketing to Millennials

The rallying cry to market to Millennials carries extra significance among credit unions. With an average member age of 53 according to the World Council of Credit Unions, interest in Millennials is logical. Attractive too, given a size that makes up almost a third of the US population and a collective net worth of more than $8 trillion.

Does a strategic focus to pursue Millennial customers run counter to Home Equity Lending as a growth strategy? The data do not point to that.

More than 50% of Millennials are homeowners with homeownership among older Millennials aged 35 to 44 surpassing 60%. Furthermore, the Home Equity Lending News article, “Millennials Lead Home Equity Growth Outlook,” underscores home equity lending growth opportunities among Millennials. Citing ServiceLink’s 2023 State of Homebuying Report and pointing to survey respondents who plan to take out a home equity loan, Millennials are the most likely at 49%.

On the data alone, a growth strategy to pursue Millennials is indeed logical AND compelling.

Designing a New Credit Union Member Experience

It is important to keep generational differences in mind when designing digital solutions for this demographic. A few factors are notable in shaping the experience and driving outcomes.

• Personalization – Most financial institution customers (54%) indicated that personalization influenced their decision to become a customer while 68% of existing customers were influenced to buy more products or services.

• Localization – Credit unions with a distinct geographic focus hold a unique advantage in the Search Engine Optimization (SEO) battle. 46% of Google searches are for local businesses and nearly all search engine users (97%) search online to find a local business.

• Immediacy – A fast website is a base-level expectation. Now, it’s more about reducing the distance between when a person has an idea and when that interest has been satisfied (i.e., the overall journey).

In the context of home equity lending, these factors for a new and improved customer experience can be implemented in a next-generation version of the common mortgage calculator. Too many mortgage calculators today limit the customer experience. Websites all too often present static information while customers visiting those sites are asked to provide information that is invasive or necessitates additional research. Those information requests and the websites that abruptly push customers into a formal application process are roadblocks and they jeopardize the opportunity to serve the customer.

Making a Modern Loan Calculator

Millennial expectations for an intuitive, personalized digital experience combine with marketing’s objectives for a data-driven approach to create an opportunity for a reinvented – and better – website loan calculator.

An alternative to the conventional calculator is one that gives answers rather than asks questions. Data and technology make this a reality that is available today. While the consumer is on your credit union’s home equity lending page, serve up property valuations behind the scenes and simultaneously total up recorded lien amounts to determine a specific property’s equity. Integrate your credit union’s own underwriting parameters too. The instantaneous indication of a specific property’s equity builds momentum in a way that produces more applications.

Case Study Shows Lift

If your institution’s home equity calculator creates a customer experience that lacks any of these elements or if you are interested in how conversion and capture rates can beat industry benchmarks, reach out to patrick.troppe@propertyinsight.biz for a free copy of ValueCheck’s Home Equity Calculator case study.

References

Millennial Spending Habits

• https://www.lexingtonlaw.com/blog/credit-cards/millennial-spending-habits.html

• Most US millennials finally own homes – and it’s not thanks to their parents | US news | The Guardian

• Millennial Home-Buying and Homeownership Statistics | The Motley Fool

• American Community Survey (ACS) (census.gov)

• U.S. Bureau of Labor Statistics, Consumer Unit Characteristics: retrieved from Federal Reserve Economic Data | FRED | St. Louis Fed (stlouisfed.org)

• Millennials Lead Home Equity Growth Outlook - Home Equity Lending News (hel.news)

• How Millennial Homeownership Is Reshaping the Market – Forbes Advisor

• This is how millennials are fueling the rental economy | World Economic Forum (weforum.org)

Digital & Customer Experience

• 4 ways banks, credit unions can improve the customer experience | Credit Union Journal | American Banker