The Modern Homebuyer Survey by ValueInsured, that asked homebuyers what they thought of mortgage lending, found that they see little differentiation and innovation from mortgage lenders, making shopping for the lowest rates and points their only points of differentiation, when it comes to buying mortgage.
The survey, indicated that some homebuyers, especially the experienced ones, had trouble distinguishing or differentiating among mortgage lenders with slightly over 53 percent of all interested homebuyers and 65 percent of experienced homebuyers saying that mortgage options from all mortgage brokers and lenders were virtually the same.
However, the survey found that non-home owning millennial women were most open to learning more about the differences among different lenders with 68 percent believing they were not all the same.
In terms of innovation, the survey found that 54 percent of all homebuyers believed that the mortgage industry lacked innovation and had not changed in a decade. Nearly six in 10 people who would have bought their first homes 10 years ago said that mortgage lending had not changed in all this time. In fact, 52 percent perceived that mortgage options were the same for them as what might have been available to their grandparents. Again, millennial female first time homebuyers were more open to learning about the latest mortgage innovation with 69 percent believing that options had changed over the years.
Despite these statistics, around 63 percent also believed that they could soon close a mortgage entirely online without help from a mortgage professional, pointing to a trend among lenders of racing to the bottom of offering the lowest points and rates to remain competitive.
The survey also showed that most homebuyers saw mortgage products as a commodity, with 64 percent homebuyers saying that all mortgage lenders offered the same products so they only shopped for points and rates, and 71 percent homebuyers saying they didn’t care whether it was a loan officer or mortgage broker as long as they were offered the lowest rate, pointing to the need for educating buyers on better ways to buying or refinancing their homes.