What do mortgage borrowers want? Research from the real estate side of the market suggests the top three things buyers are looking for.
One obvious key to higher borrower satisfaction scores is giving borrowers what they want, but that can be tricky when we’re offering a product that no home buyer really wants to buy. Consumers want to buy a new home, not take out a mortgage to pay for it. That’s just a necessary evil.
But it doesn’t have to be.
A recent study conducted by Spruce, a proptech company that develops software for online real estate transactions, recently uncovered the three things that most homebuyers say they want. The good news is that the mortgage industry can deliver all three of them.
In its survey of American home buyers, Spruce found that there are three priorities that virtually all respondents ranked highly.
Affordability -- the survey question was referring to home prices, which have been rising rapidly over the past year, and so obviously this was a top concern of home buyers. But it’s the same in our business.
We know that borrowers shop rate first and then file loan applications with a number of lenders so they can find out how the other fees will stack up before making their choice. There is often little the originator can do about the products, rates and fees available at the time, but it reinforces what we already know: having affordable options makes borrowers happy.
Transparency -- consumers don’t like being surprised by things they didn’t know in advance. Since it’s virtually impossible for them to know everything about the complex real estate purchase process, it’s no surprise that this was also ranked high by survey respondents.
We also know that this is critically important to consumers when they file mortgage loan applications. We know this because they’ve told J.D. Power & Associates as much every year in its annual loan origination customer satisfaction survey. In it’s 2020 survey, the most recent available, the company found:
Satisfaction directly linked to frequency of communication: The more lenders communicate with customers during the application, closing and onboarding processes, the more customer satisfaction improves. Customers with the highest level of satisfaction (929) receive daily communications from their lender. However, this occurs just 11% of the time.
The more information we provide our borrowers, the more satisfied they will be.
Time-to-Close -- No surprise here either. There is a inverse correlation between the time it takes to complete our process -- and, by extension, the real estate sales process -- and borrower satisfaction. The longer it takes, the lower our satisfaction scores will be.
This is one of the five key metrics that define high performance lending and it’s something we’ve been studying at Mortgage Cadence for years. The key is technology, but only when combined with the right process and well-trained people. Challenging for some, but definitely attainable.
It probably should come as no big surprise that the same things consumers care about during the home buying process are just as important when it comes to the financing. But it’s nice to know that loan originators and their real estate sales partners are working to deliver the same things.
Working together, we can provide what mortgage borrowers want and everyone will win in the process.
By Joe Camerieri, EVP, Client Account Management at Mortgage Cadence
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