50% of First-Time Home Buyers Lack Full Understanding of Their Mortgage Options

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54% of the first-time home buyers who participated in the J.D. Power’s U.S. Primary Mortgage Origination Satisfaction Study for 2014 responded that they did not understand fully the different mortgage loan options available to them.

The purpose of the study was to measure the satisfaction of consumers with the mortgage origination process. Satisfaction was measured based on six different factors. These included loan products, application and approval process, communication, closing process, onboarding and the resolution of issues. The consumers who participated in the study were both first-time home buyers and experienced mortgage borrowers. The first-time home buyers accounted for 58% of all participants. The share of those who went directly to a local lender’s office to obtain personalized information was 48%.

The study revealed that the overall borrower satisfaction with the mortgage origination experience in 2014 was 786 points. It was measured on a 1,000-point scale.

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The share of customers who indicated that they did not completely understand the mortgage process was 35%. In the sub group of first-time home buyers, the share of those who did not fully understand the process was 46%. On average, the overall satisfaction score declined by 179 points.

While 54% of first-time home buyers did not fully understand their home loan options, 41% indicated that their loan officer had explained the different types of mortgages and their features completely.

The largest deduction in points for satisfaction came from the communication factor. It was reduced with 236 points due to loan officers failing to call customers back as promised.
In the group of first-time home buyers, 44% responded that the closing agent had not completely explained all of the closing documents. In the group of experienced customers, 26% shared this opinion. The failure of lenders to explain the closing process resulted in a decline in the overall satisfaction of mortgage customers by 144 points.

Mailynne

Mailynne

Mailynne serves as a content strategist and writer for mortgage.info. She is ahighly task-oriented strategic planner and experienced writer. Over the past 10 years, Mailynne has managedcontent for both large corporations, non-profits and businesses. She specializes in managing digital marketing,branding and web development content. Mailynne has worked with a variety of local, national and international organizations.

Contact: mailynne@mortgage.info
Mailynne

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