Millennials are currently the largest generation of Canadians, making up 27% of the nation’s total population. Millennials, who range from 25 to 40 years old, have also had the unique experience of living through two major economic crises – the Great Recession of 2008 and now, the COVID-19 pandemic. This generation is facing different challenges in building wealth than their parents, despite being the most educated.
In addition, many of these individuals belong to the “sandwich generation” who are taking care of their aging parents while also financially supporting their children. The unique circumstances faced by this generation can lead to challenges when it comes to seeking financing and qualifying with traditional lenders. As millennials continue to make up the largest share of home buyers in Canada, you have an opportunity to help these individuals find financing and access cash in various situations, depending on their needs.
Many millennials can benefit from tapping into their home equity to fund projects, instead of relying on unsecured credit which can negatively affect their credit rating. With both aging parents and growing children, there are several expenses that can come up unexpectedly.
With the benefit of both speed and flexibility, a private mortgage can provide cash relief to clients whose parents are transitioning into senior residences, require support to afford medical expenses, or have kids who require financial aid with tuition costs and other living expenses. Even millennials who have recently bought their first home can benefit from a private mortgage by using their available equity to finance a new business venture, purchase a family vehicle, or maybe take that much-needed family vacation.
In addition, you can also recommend clients use a second mortgage to fund home improvements, like adding an extension for older relatives to live in, or for additional living space for students who are going to be studying close to home. Private lenders can offer financing to renovate a space in the family’s private residence, which will likely increase the value of the home as well.
For millennial clients who have accumulated credit card and other unsecured debt, you can add value by developing a personalized debt consolidation plan. Private lenders can use equity from your client’s home to consolidate unsecured debt into a mortgage, which ends up being more affordable than high-interest credit card payments and strengthens their credit.
This may also be a helpful tool for clients who have looming student loans. In addition, if your clients owe money to the CRA, banks and other traditional lenders are not likely to help. Private lenders offer flexible short-term financing solutions that can help clients meet immediate cash flow needs while setting them up to qualify for traditional financing down the road.
For younger millennials still working towards home ownership, it’s not only been more difficult to build wealth, but also harder to qualify for a traditional mortgage because of the evolving job market and the rise of the gig economy. Private lenders, like CMI, take a more common-sense approach to income verification, compared to banks who have hard and fast rules as to what they can accept as qualifying income.
Focusing your business to accommodate millennial borrowers is integral to success in the current mortgage landscape. When dealing with millennial clients, remember that members of this generation are considered “digital natives” that are used to instant gratification, and quick and easy service. Leading private lenders, like CMI, are focused on providing you and your clients with digital technology platforms to facilitate quick and customized financing solutions for this demographic.
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