Fannie Mae’s 2021 Q1 Housing Survey indicated that homebuyers remain satisfied with the mortgage process. It also illuminates how the pandemic is affecting the home-buying process. Specifically, the survey looked at whether the pandemic encouraged home buyers to use more digital processes.
Satisfaction Levels Holding Steady
Fannie Mae’s survey shows that 88% of homebuyers were satisfied with their mortgage experience in the first quarter of 2021. This is unchanged from 2020 despite lenders working remotely and dealing with increased volume. Consumers were slightly more satisfied with credit unions and traditional banks than they were with mortgage banks. Ninety percent of homebuyers were more satisfied with traditional banks, 93% were more satisfied with credit unions and 85% were more satisfied with mortgage banks.
From the mortgage lender’s perspective, 78% reported that the mortgage experience had improved or stayed the same, according to the Q1 2021 Mortgage Lender Sentiment Survey.
Digitization of the Mortgage Process
There was a slight increase (12% vs. 7% in 2020) in homebuyers conducting mortgage tasks online. However, the study found that the “one size fits all” digital process was not suitable for all consumers.
Although Fannie Mae predicted that many homebuyers would move to completing mortgage tasks online, there was only a slight increase. Many homebuyers still wanted to speak directly with a representative during the mortgage process. Fannie Mae attributed this to the fact that a mortgage is a “large, complex and infrequent” purchase.
Of the homebuyers who used digital channels to complete the mortgage process, 57% said the pandemic had no bearing on their choice to do so. Thirty-eight percent said that the pandemic did figure into their decision to use digital channels.
If you look at percentages of first-time homebuyers (primarily millennials) compared to repeat homebuyers, this makes sense. Forty-one percent of first-time homebuyers were more likely to authorize electronic access to their records compared to only 33% of repeat homebuyers. Fannie Mae attributes this to millennials who grew up allowing digital apps and online companies access to their financial records.
Which Mortgage Tasks Are Being Done Online
Compared to 2018, there was an increase in homebuyers willing to do early mortgage tasks like learning about the mortgage process or better understanding different terms and options online. However, there was a decrease in consumers’ preference for online tools for later tasks such as pre-qualification or getting updates about their loan.
The survey also looked at race and income levels. Higher-income Asian and Black respondents showed a preference for completing mortgage tasks online, while lower-income and Hispanic homebuyers preferred to complete mortgage tasks in person.
Some Conclusions to Take Away
Fannie Mae stated “Consumer satisfaction in the mortgage experience remained high during the pandemic, but the change in consumers using online processes was not as large as we expected.” The company also stated, “The shift to digital continues to be a gradual process, with certain segments showing different online servicing/in-person needs. Since buying a home is an infrequent and complicated expense, shifting to online-only channels appears to be an imperfect solution for many borrowers who have questions and want to make the right choices.”
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