Supporting the American Dream: How financial institutions can aid homebuyers

June is National Homeownership Month. It’s a month to reflect on the benefits of owning a home, the positive impact it has on an individual’s quality of life, and to discuss the importance of making homeownership more attainable for all Americans. Owning a home is tantamount to the American Dream, and people across the nation continue to work toward that goal of safety and security. Despite mortgage rates hitting incredible highs last year along with record-setting inventory lows, homebuyers are still determined to get themselves into a home.

Fannie Mae predicts home prices will rise 4.8% year-over-year by the end of 2024. With mortgage rates sitting in the 6.5% to 7% range, affordability is a challenge for most. It’s safe to say that prices will continue to be high, so how can we ensure Americans make their dreams come true? Financial institutions (FIs) can play a large role in helping their members move into their dream homes, by offering valuable advice, providing technology platforms that facilitate homebuying, and guiding homebuyers every step of the way.

In my 30+ years of experience in the industry, I have a few tried and true strategies I encourage FIs to practice to successfully help their members.

Tell your members to research the area they would like to be in. Encourage individuals searching for a home to compile the most desirable factors in a neighborhood to help get a feel for where they could live. Whether it’s school districts, square footage, or otherwise, tools such as Realtor and Zillow allow users to research comparable districts in the area. These resources can provide a better understanding of what is a realistic value to expect in the area they are looking in. Realtor and Zillow can also be used to set alerts for new listings and provide insight into market trends as they develop.

Throughout the country, local government websites offer information on upcoming community development projects, details on crime in the area, as well as property tax information. Local credit unions should provide their members with resources for programming in and around their neighborhoods.

Collaborate with members on this research phase. As they outline different desirable areas, FIs can use their deep seat of resources to uncover whether the member’s budget aligns with that particular neighborhood. This is an opportunity to help save members time; if an area is out of their reach, FIs can tell them early on so they don’t waste time looking at homes in an area they can’t afford.

Help educate your members. Be proactive. Providing members with educational resources and support around credit improvement and budgeting is invaluable as they prepare to pursue a mortgage and buy a home. Workshops, webinars, and one-on-one counseling sessions throughout the year are smart options.

Additional online educational material, such as budgeting tips and worksheets, mortgage information, and other key factors can help members decide where to live. Consumers are already online seeking this information, so it only makes sense for financial institutions to embrace the digital-first model.

I also find that tools from Experian and NerdWallet are useful and have helpful insights for individuals during every step of the journey. The important thing is to offer assistance to your members. Homebuying is a stressful, scary, and all-consuming experience; the more supported members feel by their FIs, the better.

Empower members to get pre-approval: Encourage members to start the home-buying process by getting pre-approved for a mortgage. Pre-approval provides members with a better understanding of their purchasing power, since it provides an overview of just how high they can go when making an offer, while helping to narrow down their list of mandatories and nice-to-haves for their search.

Lean into technology: With consumers turning to their financial institution for advice on how to make the best decision with their money, it’s important to stay up-to-date with current market trends to successfully deliver on customer expectations. Different technology platforms can improve the home-buying process by increasing accessibility and convenience at every stage of the process. In offering seamless omnichannel experiences, easy online and mobile applications, 24/7 customer service chatbots, and automated decisioning, consumers will know that their institution is there for them, and this, in turn, goes a long way to make the home-buying process a little simpler. What’s more, technology should be used to provide consumers with personalized offers and support based on their unique needs and financial situation.

Suggest lending programs: Tell your members about the federal, state, and local government agencies (and private organizations, too) that have mortgage programs designed to help prospective homebuyers and current homeowners finance or refinance a home for purchase. For first-time home buyers, an FHA loan is a good option to explore, with low down payments, lower interest rates, and leniency on credit requirements. Veterans, service members, and eligible military spouses may qualify for a VA loan to help with purchasing a home, or to help with other housing-related programs. USDA loans are an excellent option for homebuyers on a budget with flexibility on where they live.

These loans can also be used to help with renovations, repairs, energy-efficiency improvements, new construction, and more. When working with members on purchasing a home, look into those lending programs to see if any of your members qualify. However, I’d advise any financial institution to be mindful of their members’ budgets so as not to recommend a solution that may overextend their finances.

While these resources above are a good starting place to provide members the support they need, strategies that work best will depend on the individual’s financial situation and what specifics they’re looking for in a home. FIs who offer this advice are poised to serve as partners and advisors to their members during one of the biggest moments of their lives.

As someone who has gone through the process of looking for and owning a home, having a financial institution that cares about my financial well-being goes a long way to fostering loyalty. It’s also why I am proud to work at MeridianLink, an organization that empowers FIs to develop lifelong financial management relationships to support a member’s entire financial journey. Whether it’s deposit account opening, consumer and mortgage loan origination, or otherwise, MeridianLink’s industry-leading suite of digital lending solutions puts financial institutions in the best position to support members.


JP Kelly

JP Kelly

JP is a Seasoned executive and entrepreneur with broad experience in all aspects of executive management, business development, software marketing, software and strategic growth for tech-driven, financial, real estate companies. Web: Details