CHERRY HILL, N.J. – March 12, 2014 – The TD Bank Mortgage Service Index found that 69 percent of recent buyers had an “excellent” or “very good” experience with their bank or lender – up slightly from 66 percent last year. However, three in 10 recent buyers found the process less than ideal.
According to the survey, consumers continue to experience high levels of stress from the home buying process, and they expressed less satisfaction with online tools and overall simplicity.
“The results of this year’s TD Bank Mortgage Service Index indicate that there is still a need to provide consumers with more information and clarity in the home financing process,” says Michael Copley, executive vice president, retail lending, TD Bank. “To successfully navigate the mortgage process, first time and experienced buyers should shop around to find a lender who is committed to a convenient, accessible and transparent mortgage process.”
A stable homebuying experience
Closely tracking results from last year’s survey, more than half of the respondents said they had “excellent” or “very good” experiences in: finding a home (57 percent), finding a good Realtor (57 percent), finding the right lender (56 percent), appraisal/inspection process (56 percent) and the length of the entire process (51 percent).
This year, slightly more buyers turned to their primary bank for a mortgage loan (37 percent) compared to last year (34 percent).
In Florida, 56 percent of buyers who purchased a home within the past 10 years considered the experience “excellent” or “very good,” while another 37 ranked it as “okay,” the remaining 7 percent ranked it as “not very good” or “not good at all.”
When asked about specific tasks in the buying process, 60 percent of Floridians liked the mortgage approval process; 55 percent liked the home search; 52 percent said they found a good Realtor; 53 percent were okay with the inspection/appraisal process; 45 percent said they found the right lender; and 47 percent were satisfied with the length of time it took to finish the process.
“It may make sense for homebuyers to investigate the specific benefits of securing financing at their bank,” says Copley. “Beyond just the correlations with positive experience, there can be other advantages.” He notes that some lenders offer discounts when consumers have multiple accounts at the same bank.
More simplicity desired
As with the 2013 Index, buyers continue to cite lenders’ accessibility, transparency and responsiveness as key to an excellent mortgage experiences. Of those who purchased a home within the past two years, 70 percent rated their lender as “excellent” or “very good” in responsiveness, honesty and transparency, and ability to explain mortgage rates and terms. Those who purchased a home within the past two years also had a more positive experience with accessibility (68 percent) compared to consumers who purchased a home in the last 10 years (63 percent).
Additional factors that buyers ranked as generally positive include:
• explained mortgage rates and terms (59 percent)
• instilled confidence throughout the process (58 percent)
• helped buyers understand the process (58 percent)
• explained the mortgage and available options (58 percent)
Simplicity (56 percent) and easy-to-use online tools (51 percent) ranked lowest, indicating less satisfaction with these aspects when interacting with lenders.
Stress is still a factor
Compared with last year, more homebuyers reported the home buying experience as being “extremely” or “very” stressful (30 percent vs. 24 percent in 2013). Among home buyers who had a good homebuying experience overall, 85 percent reported a very good lender experience.
In Florida, 30 percent of buyers over the past 10 years found the process “extremely stressful” or “very stressful.” An additional 46 percent found it “somewhat stressful.” The remaining 24 percent said it was “not very” or “not at all” stressful.
• 14 percent of Florida buyers over the past 10 years said the length of the mortgage process delayed their closing. Overall, Florida and New York Hispanics reported the longest delays
• In Florida, 59 percent of buyers applied for a mortgage in person; 26 percent did so via phone; and 15 percent applied online
• 63% of Floridians had either an “excellent” or “very good” experience with their lender, while 27% said it was “okay.” However, 10 percent reported that the lender experience was either “not very good” or “not good at all”
• 40 percent of Floridians reported that their loan was sold to a secondary lender sometime after closing
• 82 percent of respondents feel that this year is a “very good” or “good” time to buy a home
• On average, fewer homebuyers (20 percent) feel it’s a “very good” time to purchase a home compared with 29 percent last year
• Almost a quarter of homebuyers (21 percent), up from 18 percent last year, are extremely “very likely” or “likely” to purchase a home this year
• 51 percent of respondents surveyed said that they expect the housing market to stay the same over the next six months
• First-time homebuyers account for nearly one-half (49 percent) of the home purchases this year, up from 45 percent in 2013
• On average, homebuyers considered two banks or lenders when applying for a mortgage
The Index is a national survey of 1,500 consumers who purchased a home within the last 10 years. TD Bank says it commissioned the survey to help gauge consumers’ experiences throughout the home buying and financing process, and also to help identify industry best practices for lenders.
© 2014 Florida Realtors®