1 Out Of 5 Borrowers Unhappy With Their Mortgage Lender

4 Tips to Improve Your Mortgage Process

1 Out Of 5 Borrowers Unhappy With Their Mortgage Lender
January 9, 2017

"I could have done better." With respect to mortgage lenders, approximately one-fifth of homebuyers felt this way last year, according to the 2016 J.D. Power US Primary Mortgage Origination Satisfaction Study.

The study found that 21% of all homebuyers and 27% of first-time homebuyers regretted their choice of mortgage lender. Discontent fell into two general categories: lack of communication and being steered toward a specific mortgage product.

A full 72% of those regretting their choice noted pressure to choose a specific product, leading some consumers who received a good deal to report "happy buyer's remorse." A perception of unclear choices or lack of control dissipated the satisfaction of a good deal. The common thread in both sources of discontent is that customers can feel disengaged, with their interests being placed well below the bank's interests.

How can you increase your chances of a positive mortgage-lending experience? We suggest starting the engagement process on your side with the following four tips:

1. Understand the Process Research the mortgage lending process beforehand and you are more likely to have a positive mortgage experience, especially if you are a first-time buyer. Even experienced buyers should review the process to see how the markets and rules have changed since the last purchase. MoneyTips can help, with guides like Understanding the Loan Approval Process, Mortgage Pre-Approval Necessities, and Your New Mortgage Forms.

Research can help you to understand all the terms, have a basic concept of a good mortgage rate for your credit score and housing market, and give you the insight to question a lender when some aspect of an offer doesn't seem right.

2. Plan Before You Buy – Lay out your expectations for both a loan and a lender. Start with the loan. Size up the market in which you intend to buy, and determine the size of loan that you need given your intended down payment. You are more likely to resist being driven toward a particular product that doesn't fit your needs or overreaching into a loan product that you cannot realistically afford.

Next, assess what you prefer in terms of a lender. Do you like the convenience of the online experience? Do you prefer face-to-face personal service? Is price the dominant factor or are you willing to pay for a greater level of service — and if so, how much extra will you pay?

According to the survey, it can also help to begin your mortgage search before looking at specific homes. With greater confidence in your mortgage options, you can focus on your home choice and not be distracted by a lender steering you in a direction opposite of your goals.

3. Get Multiple Quotes – A mortgage loan can be like a spouse in one aspect: you're more likely to look longingly at what might have been if you don't consider multiple options before making your commitment. During your early research phase, whittle the lending options down to the top two or three vendors before drilling down to the next level of scrutiny and price comparison. You can receive good quotes and service from AmeriValue.

4. Ask Questions Don't be railroaded into accepting deals that you don't fully comprehend, and never sign anything without a full understanding. Ask questions to clarify options and terms. If you don't receive the answers that you need, consider a different lender. (This drives home the importance of multiple quotes to provide leverage in your discussions).

If you intend to enter the housing market in 2017, preparation and planning is your best bet for a happy mortgage lending and home buying experience. Stay informed, ask questions, and understand what you will and will not accept with a loan and a lender, and you are more likely to be on the right side of the 2017 J.D. Power survey.

If you want to see your credit score and credit score for free within minutes, try Credit Manager by MoneyTips.


Photo ©iStockphoto.com/alexkich

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brittany.martinez530 | 01.09.17 @ 18:01
This really doesn't surprise me at all really. I think things would be a lot better if people took the time to look into leaders and really shop around before they chose to settle.
Crystal | 01.09.17 @ 18:19
This comes as no surprise. I've worked with both local and national lenders and the experience has always been less than favorable. Customer service is key. Yet it is missing.
Nancy | 01.09.17 @ 19:21
As a first time buyer I was definitely discontent with the loan process. And I think that can be traced back to number one on your list. I did not fully understand the process.
Zanna | 01.09.17 @ 20:13
These things are terrible to try to understand! I wish we had gotten multiple quotes, but at the time we thought one was much like any other. Next time I will be better prepared!
Christina | 01.09.17 @ 21:01
Just as with any other financial process, it pays to research and know the most current information!
$commenter.renderDisplayableName() | 06.23.17 @ 17:18
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