1. Help potential homebuyers see ownership as   valuable and feasible 

In our father’s day, few people preferred renting over owning unless affordability stood in the way. But today—even during prosperous times—some people opt for renting over owning based partly on misconceptions about the options available to them and how wealth grows through ownership. However, lenders can:

• Educate on the stability offered by a fixed-rate mortgage and building equityOpens in a new window over the long term.
• Ensure potential homebuyers who are self-employed—a growing segment of the population—understand their status won’t be a disadvantage when applying for a mortgage.
• Communicate that being cost-burdened prohibits people from building up an emergency fund to get through unexpected hard times. A Freddie Mac surveyOpens in a new window shows 84% of renters believe renting is more affordable than owning, yet 42% of renters paid more than a third of their household income on rent compared to 24% of owners on their mortgage.

2. Be a trusted guide through the mortgage         process

Most first-time homebuyers have some trepidation about going through the mortgage process, especially with today’s uncertainty. Housing professionals can play a key role early on by:

• Assessing where the homebuyer sits on the financial literacy scale. Look for teachable moments and use pre-purchase counseling to educate first-time homebuyers—a practice that has been proven to reduce delinquencies by 29%, according to one Freddie Mac studyThis links to a pdf file.
• Educating on building and maintaining credit, responsible homeownership practices, and what to do in times of trouble.
• Emphasizing the importance of getting pre-qualified, then set expectations by preparing borrowers for the homebuying timeline

3. Present the full range of first-time buyer mortgage options

When I bought my first house, I didn’t know anything about the process. I paid excessive fees and a high interest rate. I was young and educated, but with no mortgage experience. Today, housing professionals are armed with more tools and resources to help first-time buyers, particularly in the affordable market. For example:

• Increase your retention and referrals by staying current on new mortgage options for first-time homebuyers, such as low down-payment loans for qualified borrowers and factory-built housing.
• Use new tools that give a realistic view of a client’s risk and eligibility.
• Nurture personal relationships and help borrowers understand mortgage products so they can choose the one that’s best for them.