TD Bank Mortgage Service Index Finds More Simplicity and Lending Guidance Needed to Maintain Positive Home Buying Experience

Homebuyers who rate their lender as "excellent" or "very good" up nearly five percent year over year

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Mar 05, 2014, 09:00 ET

CHERRY HILL, N.J., March 5, 2014 /PRNewswire/ -- TD Bank, America's Most Convenient Bank^®, today released the findings of its second annual TD Bank Mortgage Service Index survey, which found that a majority of consumers continue to feel positive about their home buying experiences.

The TD Bank Mortgage Service Index revealed that 69 percent of respondents had an "excellent" or "very good" experience with their bank or lender – up slightly from 66 percent last year. However, consumers continue to experience high levels of stress from the home buying process and expressed less satisfaction with online tools and overall simplicity.

The Index is a national survey of 1,500 consumers who purchased a home within the last 10 years. TD Bank commissioned the survey to help gauge consumers' experiences throughout the home buying and financing process, and also to help identify industry best practices for lenders. For full survey results and regional data visit https://mediaroom.tdbank.com/msi2014.

"The results of this year's TD Bank Mortgage Service Index indicate that there is still a need to provide consumers with more information and clarity in the home financing process," said Michael Copley, Executive Vice President, Retail Lending, TD Bank. "To successfully navigate the mortgage process, first time and experienced buyers should shop around to find a lender who is committed to a convenient, accessible and transparent mortgage process."

A Stable Home Buying Experience
Overall, 62 percent of those surveyed found their most recent home buying experience to be "excellent" or "very good," with 66 percent also reporting a positive mortgage-approval process. Closely tracking results from last year's survey, more than half of respondents said they had "excellent" or "very good" experiences during the following: finding a home (57 percent), finding a good realtor (57 percent), finding the right lender (56 percent), appraisal / inspection process (56 percent) and the length of the entire process (51 percent).

The survey also revealed a slight uptick of homebuyers looking to their primary bank or financial institution to obtain a mortgage compared with 2013 (37 percent vs. 34 percent last year). Those who purchased a home within the past two years were more likely to obtain their mortgage through their primary bank (46 percent). Of those buyers, 71 percent reported a "very good" or "excellent" experience.

"It may make sense for home buyers to investigate the specific benefits of securing financing at their bank," added Copley. "Beyond just the correlations with positive experience, there can be other advantages. For example, at TD we offer a mortgage rate discount for customers who maintain a checking or savings account with the bank."

Overall Positive Perceptions of Lenders, But More Simplicity Is Desired
As with the 2013 Index, buyers continue to cite lenders' accessibility, transparency and responsiveness as the key to excellent mortgage experiences. Of those who purchased a home within the past two years, 70 percent rated their lender as "excellent" or "very good" in responsiveness, honesty and transparency, and ability to explain mortgage rates and terms. Those who have purchased a home within the past two years also had a more positive experience with accessibility (68 percent) as compared with consumers who purchased their home in the last 10 years (63 percent).

Additional factors that buyers ranked as important include: explained mortgage rates and terms (59 percent), instilled confidence throughout the process (58 percent), helped buyers understand the process (58 percent), and explained the mortgage and available options (58 percent). Simplicity (56 percent) and easy-to-use online tools (51 percent) ranked the lowest, indicating less satisfaction with these aspects when interacting with lenders.

Stress Is Still A Factor
As compared with last year, more homebuyers reported the home buying experience as being "extremely" or "very" stressful (30 percent vs. 24 percent last year). Not surprisingly, home buyers reporting a good buying experience cited less stress in the purchase process. Among home buyers who had a good home buying experience overall, 85% reported a very good lender experience.

"With the implementation of new regulation and an anticipated rise in interest rates, lenders should be cognizant of homebuyers' needs and anxieties, by being accessible, reliable and responsive," said Copley. "As the Index has found, buyers are looking for a lender that explains the mortgage process, current rates and loan terms in detail. At TD Bank, we encourage face to face meetings and open communication to help create a better experience for buyers."

Other Key National Findings From the Mortgage Service Index Include:

Eighty-two percent of respondents feel that this year is a "very good" or "good" time to buy a home
On average, fewer homebuyers (20 percent) feel it's a "very good" time to purchase a home as compared with 29 percent last year
Almost a quarter of homebuyers (21 percent), up from 18 percent last year, are extremely "very likely" or "likely" to purchase a home this year
Fifty-one percent of respondents surveyed said that they expect the housing market to stay the same over the next six months
First-time homebuyers account for nearly one-half (49 percent) of the home purchases this year, up from 45 percent in 2013
On average, homebuyers considered two banks or lenders when applying for a mortgage

Highlights by Region:

There was a drop in optimism among Philadelphians, with only 36 percent of respondents feeling the housing market will improve this year, as compared to 47 percent who felt the same way this time last year
Both Philadelphians (57 percent) and Bostonians (50 percent) exceed the national average (45 percent) in obtaining their most recent mortgage through institutions where they do not have existing accounts
Seventy-one percent of those in the Big Apple feel they had an "excellent" or "very good" mortgage and lender experience, as compared to 58 percent in 2013
New Yorkers (33 percent), up from 22 percent last year, are considering purchasing a new home in the next year

Survey Methodology
The study was conducted among a nationally representative group of consumers from January 13-17, 2014. The sample size of 1,495 has a margin of error of +/- 2.5 percent. The survey was hosted by global research company Angus Reid Public Opinion.

About Angus Reid Public Opinion
Angus Reid Public Opinion is the Public Affairs practice of Vision Critical—a global research company. Vision Critical is a leader in the use of the Internet and rich media technology to collect high-quality, in-depth insights for a wide array of clients.

About TD Bank, America's Most Convenient Bank^®TD Bank, America's Most Convenient Bank, is one of the 10 largest banks in the U.S., providing nearly 8 million customers with a full range of retail, small business and commercial banking products and services at more than 1,300 convenient locations throughout the Northeast, Mid-Atlantic, Metro D.C., the Carolinas and Florida. In addition, TD Bank and its subsidiaries offer customized private banking and wealth management services through TD Wealth^®, and vehicle financing and dealer commercial services through TD Auto Finance. TD Bank is headquartered in Cherry Hill, N.J., and Portland, Maine. To learn more, visit www.tdbank.com. Find TD Bank on Facebook at www.facebook.com/TDMoneyLoungeUS and on Twitter at www.twitter.com/TDBank_US.

TD Bank, America's Most Convenient Bank, is a member of TD Bank Group and a subsidiary of The Toronto-Dominion Bank of Toronto, Canada, a top 10 financial services company in North America. The Toronto-Dominion Bank trades on the New York and Toronto stock exchanges under the ticker symbol "TD." To learn more, visit www.td.com.

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