Draft Colored BKG Copy - FHB Opportunity Playbook

Improving Affordability for First-Time Homebuyers!

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Understanding Market Trends

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The percentage of purchases by first-time home buyers has been consistently growing from around 20% of the funded loans in 2004 to over 50% as of Q2 2024. Use this interactive playbook to see how you can increase your success in turning First-Time Homebuyer Opportunities into Applications.

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Understanding Market Trends

Why the Increase in First-Time Homebuyers?

The percentage of purchases by first-time home buyers has been consistently growing over the past 20 years, from around 20% of funded loans in 2004 to over 50% as of Q2 2024. The trend has continued even after 2022 likely due to many current homeowners electing to keep their very low interest rates. First-time homebuyers will become one of the few sources of growing housing demand in the current environment due to the continued rate lock effect.

(Source: Freddie Mac)

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Understanding Market Trends

It's easy to identify these first-time home buyers with First-Time Home Buyer Opportunities in TrustEngine Platform. The Loan Officer sees an Opportunity, context and engagement strategy in the TrustEngine App, and the borrower receives a tailored engagement campaign to establish interest and pave the path for Loan Officer outreach. For these first-time home buyers in particular, it is paramount to have flexible ways to address affordability concerns and educate borrowers about viable loan options.

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Even with DPA programs, buyers struggle to qualify for a loan. One factor is the requirement for Private Mortgage Insurance when the down payment is less than 20% of the purchase price.

Let's run a Total Cost Analyses to determine the effect of PMI.

For some, down payment assistance (DPA) programs can help. According to :

• There were 29 new DPA programs established in Q3, 2024, representing a 1.2% increase this quarter.

• The average DPA benefit to first-time home buyers is $17,000.

HousingWire

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Educating Borrowers has Never Been Easier!

With Mortgage Coach, Loan Officers can quickly compare different loan options for borrowers. Doing so allows borrowers to visually compare the pros and cons to different obstacles they encounter along their home buying journey. For first-time homebuyers especially, being able to understand how different decisions can help save them money is incredibly important! Interact with the sample TCA on the right to compare and contrast 3 different loan options for the borrower. Click the button to get started!

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Loan Option 1: Monthly MI

The first loan option (Monthly MI) includes $127.50 for the monthly mortgage insurance premium, making a total payment of $3,742.10.

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Loan Option 1: Monthly MI

The first loan option (Monthly MI) includes $127.50 for the monthly mortgage insurance premium, making a total payment of $3,742.10.

Loan Option 2: Single Premium MI

The second loan option assumes that the mortgage insurance is paid up front, reducing the monthly payment to $3,614.69 (and improving affordability). As you can see in the Summary this increases the required Cash to Close by $5,940 ($64,535 compared to $58,595). However, this could potentially be negotiated as a seller concession.

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Loan Option 1: Monthly MI

The first loan option (Monthly MI) includes $127.50 for the monthly mortgage insurance premium, making a total payment of $3,742.10.

Loan Option 2: Single Premium MI

The second loan option assumes that the mortgage insurance is paid up front, reducing the monthly payment to $3,614.69 (and improving affordability). As you can see in the Summary this increases the required Cash to Close by $5,940 ($64,535 compared to $58,595). However, this could potentially be negotiated as a seller concession.

Loan Option 3: Financed MI

The third loan option assumes that the $5,940 one-time premium is added to the loan amount instead, increasing it to $455,940. This works out to a monthly payment of $3,654.21, which actually saves $87.98 compared to the monthly mortgage insurance premium.

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Guiding More Borrowers to Win-Win Scenarios

When borrowers are presented with the information needed to make educated decisions, they become empowered in one of the biggest financial decisions of their lives. When Loan Officers bring this empowerment to their borrowers, they are more likely to close deals and create repeat business. A "Win" for the borrower to take control of their financial decisions, and a "Win" for the Loan Officer by creating a repeat customer out of a First-Time Homebuyer Opportunity.

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First-Time Homebuyers are overtaking every other demographic! Are you ready to make the most out of it? Let us show you how.