While more than two-thirds of U.S. consumers give high ratings of their home buying experience with their bank or lender, they also continued to experience high levels of stress from the process, according to the findings of TD Bank's second annual TD Bank Mortgage Service Index, a survey of 1,500 consumers who purchased a home within the last 10 years.
The survey revealed that 69% of respondents had an ‘excellent’ or ‘very good’ experience with their bank or lender – up slightly from 66% the year before. However, they expressed less satisfaction with online tools and overall simplicity.
Michael Copley, executive vice president, retail lending, TD Bank, says the results of the survey show "there is still a need to provide consumers with more information and clarity in the home financing process."
Overall, 62% of those surveyed found their most recent home buying experience to be ‘excellent’ or ‘very good,’ with 66% also reporting a positive mortgage-approval process. Closely tracking results from last year's survey, more than half of respondents said they had ‘excellent’ or ‘very good’ experiences during the following: finding a home (57%), finding a good Realtor (57%), finding the right lender (56%), appraisal/inspection process (56%) and the length of the entire process (51%).
The survey also revealed a slight uptick of home buyers looking to their primary bank or financial institution to obtain a mortgage compared with 2013 (37% vs. 34% last year).
Home buyer stress
As with the 2013 index, buyers continue to cite lenders' accessibility, transparency and responsiveness as the key to excellent mortgage experiences. Among the factors that buyers ranked as important, simplicity (56%) and easy-to-use online tools (51%) ranked the lowest, indicating less satisfaction with these aspects when interacting with lenders, according to TD Bank.
As compared with last year, more home buyers reported the home buying experience as being ‘extremely’ or ‘very’ stressful (30% vs. 24% last year). Not surprisingly, home buyers reporting a good buying experience cited less stress in the purchase process. Among home buyers who had a good home buying experience overall, 85% reported a very good lender experience.
‘With the implementation of new regulations and an anticipated rise in interest rates, lenders should be cognizant of home buyers' needs and anxieties, by being accessible, reliable and responsive,’ adds Copley. ‘As the index has found, buyers are looking for a lender that explains the mortgage process, current rates and loan terms in detail."
Some are happier than others
TD Bank also notes that the home buying experience has improved for Hispanics, with 68% of Hispanics rating their experience as "excellent" or "very good," in comparison to 62% from the year before and in comparison to 62% of the general market.
Hispanic home buyers in 2014 reported an 8% decrease in their home buying stress, with 34% of respondents reporting the experience to be ‘extremely’ or ‘very stressful’ compared to 42% in 2013, according to the results of the survey.
A recent report from Zillow revealed that although minorities often have a much different experience when it comes to homeownership and seeking a mortgage, Hispanic communities will fare the best over the next year, in terms of home value growth.
To view TD Bank's entire Mortgage Service indices, click here.