Homeowners Choose Lenders Over Web: Survey
A survey jointly developed by the Consumer Financial Protection Bureau and the Federal Housing Finance Agency suggested cooperating with Realtors and striving to build a strong reputation with members may be the most important elements for drawing more purchase money loans.
In early 2014, the CFPB said it mailed the National Survey of Mortgage Borrowers to 15,000 consumers who had taken out housing finance loans in 2013.
The questionnaire contained roughly 100 questions and about 5,000 consumers responded, the CFPB said. This initial report focused on consumers who had obtained purchase money loans rather than refinanced existing notes and on first-time homebuyers.
The agencies’ research revealed that while Americans used the internet and web-based technology to find and compare homes to buy, they did not use the same tools to compare interest rates or terms of mortgages or the qualities of mortgage lenders.
According to the survey, just under half of the consumers who obtained a mortgage in 2013 did not shop for the loans or its terms and considered only one mortgage lender when deciding where to apply.
Slightly more first-time home buyers reported looking at more than one lender. The CFPB’s report did not include the precise percentages in each category.
Further, the consumers reported getting information about the mortgage terms and process only from their lenders or from Realtors who were helping them with the purchase process.
In the circumstances where the borrowers evaluated more than one lender, they did so hoping to find a better interest rate or out of concern they may not qualify for a loan from the first lender, the CFPB said.
Forty-two percent of borrowers said having a banking relationship with their mortgage was very important to them in deciding which lender to approach for a mortgage loan.
Most consumers chose a lender before deciding what sort of loan they wanted to use to finance their purchase, the survey showed.