"While it's true that borrowers with weaker credit and those seeking larger 'jumbo' loans experience longer approval times and requests for more documentation, satisfaction has remained steady among the 75 percent of mainstream borrowers with good credit applying for moderately sized loans," said Tim Ryan, senior director of the mortgage practice at J.D. Power and Associates.
Wachovia ranks highest among primary mortgage lenders with a score of 827. Wachovia improves in a number of areas from 2006 results, particularly within the closing process. SunTrust Mortgage follows in the ranking with 818, while Bank of America (760) ranks third overall.
"The percentage of borrowers working directly with their lender instead of through a third party has increased, which has helped maintain the stability of overall satisfaction since 2006," said Ryan. "This has also contributed to the average borrower experiencing faster approval and closing times."
The study also finds that consumers can improve the quality of their experience when obtaining a mortgage by keeping the following guidelines in mind:
- Working directly with a mortgage lender instead of a mortgage broker or online service leads to a more positive experience when originating a home loan. Customers who work directly with their mortgage lender also experience fewer problems.
- Customers should expect - even demand - clear communication from the lender, particularly when it comes to being informed about the application process and managing expectations for the time it takes to acquire approval. Customers who are provided with a time frame for approval provide overall satisfaction scores that are 112 points higher on average than customers who do not receive a time frame. Similarly, customers who receive updates on the status of their loan provide scores that are an average of 209 points higher than customers who don't get this information from their providers.
- Having a clear understanding of the documents and information required by the lender - such as bank statements, pay stubs, W2 forms, or tax returns - can help prevent potential roadblocks for borrowers during the loan approval process. More than one-third of all applicants are asked to provide additional information after their application is submitted, which can delay the approval of the application. On average, delays caused by requests for additional information lead to a 95-point decline in overall satisfaction.
- Borrowers should ask their lender to ensure the accuracy of application and closing cost estimates as well as monthly mortgage payments. While 70 percent of lenders provide an accurate estimate of what the monthly loan payments will be, 17 percent of customers are surprised with a higher monthly payment, which leads to a 159-point drop in overall satisfaction. Also, 12 percent of customers overall are surprised with additional fees during closing, which leads to a decline in satisfaction of more than 220 points.
