In the latest blog post about Fannie Mae’s perspectives: “Impact of the pandemic on mortgage digitization and homebuyer satisfactionAuthors Tim McCallum and Jenny Shen, both VP of Single Family Client Management Solutions, looked at home buyer satisfaction with digital home purchases during the pandemic.
The study was part of Fannie Mae National Housing Survey Q1 2021where home buyers who purchased a home in 2020 with a mortgage issue date between May 1, 2020 to December 1, 2020 were interviewed about their mortgage lending experience during the pandemic.
Overall, consumers were satisfied with their digital mortgage experience, with first-time home buyers more willing to allow electronic access to their records than repeat home buyers (41% versus 33%, respectively). Of those who used digital channels, the majority of recent borrowers (57%) said the pandemic did not affect their decision to use digital channels, but a reasonable proportion (38%) did indicate that the pandemic had some impact on their decision to use digital channels.
“As millennials start buying more homes, they may be more inclined to give lenders access to their records electronically, as many young consumers have grown up giving digital apps and online businesses access to their financial information,” the authors said. blog.
However, since home buyers are making a house-sized deal, buyers still wanted to be able to speak in person with a representative throughout the mortgage process.
“Our hypothesis was that completing mortgage tasks exclusively online would become more common during this pandemic,” McCallum and Shen said. “However, while there was a small but significant increase in the number of consumers using only online channels over the previous year (12% versus 7%, respectively), recent home buyers still wanted to be able to speak with a representative throughout the mortgage process. … … Given that mortgages are often the largest consumer expense and that they tend to be more complex than other purchases, it makes sense that people might not want to give up personal discussions and advice about such large, complex and infrequent purchases. “
Closer examination of race and income found that higher-income Asian and Black respondents were more likely to take on mortgage tasks online, while lower-income and Hispanic consumers were more likely to do tasks with a personal representative or over the phone. … These results show that there is no single best approach to accompanying consumers in the mortgage lending process, and businesses and lenders must take into account the diverse needs of individuals and groups.
In a survey of various organizations involved in mortgage lending, respondents are more satisfied with traditional banks (90%) and credit unions (93%) than with mortgage banks (85%). In addition, when segmented by size, small and medium lenders had significantly more “very satisfied” customers than larger lenders.
“In conclusion, consumer satisfaction with mortgage lending remained high during the pandemic, but the change in the number of consumers using online processes was not as large as we expected,” McCallum and Shen said. “The digital transition is still gradual, with some segments showing different online / personal needs. Since buying a home is an infrequent and complex expense, switching to online channels seems like an imperfect solution for many borrowers who have questions and want to make the right choice.
Click here for the Fannie Mae Outlook Blog: Impact of the pandemic on mortgage digitization and homebuyer satisfaction.