Homeowners are happy but wanted more mortgage info

Homebuyers say they had an excellent buying experience but would have liked more personalized help with the mortgage process.

TD Bank’s 6th Annual Mortgage Service Index surveyed 1,800 people who had bought a home in the last 10 years about their experience and about the current housing market.

Around one third (32%) said their homebuying experience was excellent, up from 16% in 2014; while a fairly constant share of 30% said it was very or extremely stressful.

Most respondents (83%) said that now is a good time to buy a home and 30% are likely or extremely likely to do so within the next 3 years. Those in the New York City/Long Island market were most likely to say they were intending to buy (48%).

Although 82% said that they had enough resources to educate themselves on the mortgage process, this was down from 90% in 2016. It was the first time since the annual index began that online resources were not the main source of information.

Realtors were the main resource reported by homebuyers (51%) followed by in-person representatives at their local bank (42%) and family/friends (38%).

This shows a potential opportunity for mortgage professionals to engage more with homebuyers.

"Today, homebuyers can search online for the basics of the mortgage process, leading to remarkably more informed borrowers than we saw even a decade ago. But the reality is homebuying requires navigating financial options, legal obligations, local guidelines and complex processes that occur on tight timelines," said Bechtel. "It's up to mortgage bankers to provide borrowers with expert, personalized guidance to reduce stress and create clarity as they make one of the most significant financial decisions of their lives."

Digital applications rising
More people are applying for their mortgages online (21%) compared to 5 years’ ago (13%) and 60% said they had completed their entire mortgage process in less than a month, a record high for this.

"Digital platforms are speeding up mortgage processing on the front and back ends," said Rick Bechtel, Head of U.S. Residential Lending for TD Bank. "When borrowers leverage online platforms for providing documents and completing necessary forms, we have found it reduces information intake time by more than 60% on average."

Other findings:

• Nearly a third (30%) of homeowners incurred $2,000 or more in unexpected charges during the home buying process.
• Nearly three quarters (74%) of homeowners took out a 30-year fixed rate or 15-year fixed rate mortgage, yet 52% plan to stay in their home for 10 years or less.
• Forty-two percent of homeowners are unaware of affordability programs, which is significant considering the increasing number of buyers contributing less than 20% to a down payment. In 2016, nearly half (48%) of homeowners said they put down 20% or more, as compared to just 36% in 2019.