Customers are more satisfied with the mortgage process than they have been in years.
Customer satisfaction with mortgage originators hit a seven-year high in 2013, with satisfaction among first-time homebuyers up considerably from last year.
According to a report released today by J.D. Power, overall customer satisfaction with mortgage originators was up for the third straight year, averaging 771 on a scale of 1,000. That’s up 10 points from 2012 and 24 points from 2011. The study rated customer satisfaction in four areas: the application and approval process, the loan representative, closing and contact.
One factor that greatly increased customer satisfaction was the use of electronic closing documents, according to the report. While only 8% of surveyed customers reported using electronic documents for closing their mortgage, their satisfaction level was 830. Among customers who closed with paper documents, the satisfaction level averaged 772.
The use of electronic closing documents improves customer closing satisfaction. Closing satisfaction among the 8 percent of customers who closed their mortgage using electronic documents in person averages 830, while satisfaction among the 84 percent of those who closed with paper documents in person is 772.
While overall satisfaction among first-time home buyers is still lower than among refinancing borrowers, that’s partially due to first-time buyers’ relative unfamiliarity with the process, according to the report. The study showed that only 61% of first-time buyers said that their loan representative clearly explained their options and that those options were completely understood – compared to 74% of repeat buyers and 81% of refinancers.
“First-time buyers often have questions and should not be afraid to ask prospective lenders about the specifics of the mortgage process and how they will be kept informed,” said Craig Martin, director of financial services practice at J.D. Power. “Much of the stress with borrowing comes from a lack of information and knowledge during the process. Asking when you will be updated and how that information will be provided are two key questions that may help improve the borrowing experience.”
Martin said that first-time buyers had special needs that influenced their level of satisfaction with their lenders. Originators who met those needs, Martin said, might be able to “distinguish themselves from the competition.”
