Keith Davis Offers His Thoughts on The Latest Trends in Mortgages

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As an accomplished mortgage professional, Keith Davis keeps up to date with the latest news and information in the mortgage industry. Just days ago, a report came out from CNBC that millennials are getting rejected at a much higher rate for loans, mortgages and credit cards.

Keith Davis says the reasons behind these rejections are interesting because the article shows that the generation younger than millennials, Generation Z, are actually more likely to be approved. Upon digging deeper into how this was possible, Keith Davis noticed that Gen Zers haven’t applied as much for loans, mortgages and credit cards, and when they do, they aren’t looking for things that are overly expensive. Millennials are much more likely to be looking for mortgages that allow them to move into much nicer homes.

The article points out that the 2010 CARD Act may still be impacting millennials in a negative way. 2010 saw credit card companies become banned from issuing new credit cards to those under 21. In order to get approval, anyone under 21 needed a job or a co-signer who would offer to pay off a credit line. With less opportunities to utilize credit, millennials are often playing from behind when it comes to establishing a strong credit score. It’s really a catch-22 for millennials as they have been willing to work on their credit score – only to be denied the opportunity.

Because of the 2010 CARD Act, a lot of millennials got used to utilizing debit cards. With horror stories of bad credit from previous generations, some millennials feel it’s easier to just avoid credit cards altogether. Keith Davis explains that this strategy makes it extremely difficult to qualify for a mortgage. Keith Davis notes that mortgages are much easier to obtain when a client has a great credit score, but no credit score to speak of is even worse than a low credit score.

The best advice Keith Davis can provide to those with younger children is to encourage starting a credit history in high school. Of course, a parent needs to stay involved and ensure spending doesn’t get out of hand. However, it’s still important that a person starts to show that they can be relied upon to receive a bill and pay it on time. Right now, the market is still in a good place. However, Keith Davis notes that mortgages will become even harder to acquire should the economy show signs of slipping. This will make credit scores only that much more important in the future.

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