6 Strategies for Loan Officers to Connect with the Hispanic Market

by Aidan P

Which demographic here in the United States is the only one to have increased their rate of home ownership for the last four consecutive years? If you answered “Hispanic” you’re exactly right. According to data released by the U.S. Census Bureau, the rate of home ownership for Hispanics in 2014 was 45.4 percent, followed by 45.6, 46.0 and finally 46.2 percent in 2017. A report released in February of this year by the National Association of Hispanic Real Estate Professionals (NAHREP) there were 7,472,000 Hispanic homeowners, an increase of 167,000 from the previous year. During that same period, the overall U.S. home ownership rate increased for the first time in 13 years.

Today, Hispanics represent 46.5 percent of homeownership gains for the past 17 years. Here’s another statistic: the Hispanic population numbers 58.6 million while at the same time account for more of the U.S. population increase than any other demographic. From the years 2007-2017, Hispanics accounted for nearly 80 percent of labor force growth in the United States.* If you’re in the mortgage business and you see these kind of numbers, if you haven’t been paying attention to this growing market, it’s time you did. The following tips and stats will help you as a loan officer connect with the Hispanic Market.

Learning Spanish?
loan officer hispanic market

Do you need to learn or speak Spanish in order to market to the Hispanic market? If you do then you’re already ahead of the game. Speaking in someone’s native language will automatically build a connection. But it’s not necessarily a requirement.  Today, second and third generation Hispanics are bilingual, so there’s no need to put together “Spanish only” material in order to properly market to this demographic.

Yet for those who do not speak Spanish fluently but do want to reach out to this market using Spanish, is a translator the answer? In a practical manner, if you’re a loan officer and you do not speak Spanish and have someone translate your marketing materials from English to Spanish, how do you respond when someone calls you on the phone wanting more information about home ownership? Unless you’re fluent in Spanish, it’s probably best to leave this option alone. Don’t think so? The American Dairy Association’s famous “Got Milk?” campaign their own Spanish translation said, “Are You Lactating?”

Instead, try “Spanglish.” When creating marketing materials as part of a campaign, combine a little Spanish and English in the same copy.  Hispanics may speak Spanish at home but English elsewhere. Spanglish is both informal and a comfortable way to communicate with other Hispanics.

The Hispanic Millennial
loan officer Hispanic millennial

The average age of a first time home buyer in the United States is 32 and 27 percent of the country’s millennial generation is Hispanic.  This group is very connected digitally, spending 25 percent more time viewing their smartphones than other millennial groups. It’s important to make sure you recognize this bit of data and develop multiple marketing channels that include social media, and especially the smartphone platform. On average, an Hispanic millennial will receive 941 text messages per month, more than any other ethnic group. 25 percent of all millennials in the United States are Hispanic.

40% in this group say they’re influenced by mobile advertising and marketing and half of Hispanic millennials use their smartphones when they shop to research the company and look up past reviews from others.

Hispanic millennials are bicultural. They comfortably read books in Spanish and speak the language around the house but they can also watch a movie in English just as easily. This tells us that it’s not necessary to market to an Hispanic millennial with just an Hispanic theme. And just as important, while incorporating Hispanic elements in your marketing materials stay away from stereotyping.

Give Choices
loan officer give Spanish options

If you’re going to market to the Hispanic demographic and you don’t have a loan officer in your office that is fluent in both Spanish and English you should consider finding an experienced loan officer who fits that bill.  There are many Hispanics who prefer to communicate in Spanish instead of English and others who don’t speak English at all.

On your website and mobile app, consider a choice on your Home Page that says something to the effect of “Spanish” and “English” as a choice of language. Then, when someone clicks on the Spanish button, it takes them to the Spanish version of your website. Your blogs and articles can also be printed in both.  And of course, the phrase, “Se habla Espanol” should appear prominently on all media.

Special Programs
loan officer give Spanish programs

The median household income of Hispanics in the United States is around $48,000, or about $4,000 per month. Using traditional debt ratio guidelines, such as 31/41 for an FHA loan, that works out to a total mortgage payment of about $1,240.  By estimating a monthly amount for taxes, insurance and parsing out a principal and interest payment of $1,000 every month, that equates to a loan amount of somewhere around $190,000 with a 30 year loan and a 4.5% rate which is essentially the same as the median home value for all of the United States.

Affordability doesn’t appear to be that much of a factor but coming up with a down payment can be. With a $48,000 annual median income, there’s not a lot left over each month for other expenses such as an auto loan, credit card and day to day expenses such as food and utilities. But there are programs that can help with down payment funds.

Down payment assistance programs can vary by city and state but they most all have the same general characteristics. Most limit the amount of household income based upon a certain percentage of the median household income for the area. The funds can be used for a down payment and/or closing costs and can come in the form of a grant or no-interest second mortgage. When the property is sold, some grants do not have to be paid back and the second lien does not require a monthly payment.

There appears to be an education and communication barrier between lenders and Hispanic borrowers. Hispanic consumers commonly believe that a minimum down payment to buy a home is 20 percent of the sales price. 56 percent think it’s difficult to get a home loan in today’s environment yet more than 80 percent think that owning a home is a good long term investment.

From this data, home ownership is a long term goal for most Hispanic households but their perception of the approval process, monthly payments and closing costs keeps them from speaking with a loan officer much less applying for a loan.

Keep Connected
loan officer stay connected with hispanic market

Relationships and family are extremely important in the Hispanic community. When a prospective client contacts you or one of your loan officers for more information, don’t just do a “one and done.” Have the ability to easily enter new prospect information in your database and add them to your marketing campaign. Regular emails, newsletters and tweets catering to the Hispanic market will go a long way in gaining market share with this key group. When your materials are catering to but not pandering to the Hispanic market, it tells them they matter to you and your company.

Keep connected by more than just your marketing materials and join a local Hispanic real estate or professional organization. There are more than 58 chapters and 30,000 members of the National Association of Hispanic Real Estate Professionals, for example. Reach out to these professionals and consider putting on a series of home buying seminars about first time home buying, FHA loans and other housing assistance programs.

Paying Attention
loan officer pay attention to hispanic market

According to an article first published on Forbes.com, Hispanics are much more inclined to respond and are more receptive to commercial advertisements. This means your marketing materials will be more cost effective, providing a greater ROI compared to other ethnic groups.

Conclusion

Successful loan officers and Production Managers know that exploring and dominating a market niche can be more effective compared to trying to be all things to all people. There are loan officers who specialize and promote their services to first time home buyers. The luxury market is a specialty niche as well. Yet the emergence of the Hispanic market should no longer be ignored.

The Hispanic market wants to be homeowners yet many feel they won’t be able to qualify and that is simply costs too much to buy a home. By using these strategies to understand how to market to the Hispanic demographic you can take advantage of this class that clearly understands the importance of owning a home but don’t know where to start.  

Research Sources:

Translation Gone Bad: Infamous Marketing Busts” www.branscape.com May 26, 2017

The Hispanic Market ‘Long Tail;” Five Hidden Growth Opportunities for U.S. CMOs wo Win in 2017” forbes.com  January 18, 2017

Hispanic Home Ownership Report, 2017 National Association of Hispanic Real Estate Professionals, February 2018

Using Spanglish to Take Your Hispanic Marketing to the Next Level” Hispanic Marketing, May 2, 2015

What Your Company Needs to Know When Marketing to Hispanic Millennials” Lane-Terralever, August 1, 2017

Aidan P
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