TD Bank's Inaugural Mortgage Service Index Reveals Hispanic Home Owner's Experiences During The Home Buying Process
Hispanics' Lending Experience Has Fallen Short, Yet They Are More Likely to Buy a Home in the Next Year as Compared to the General Population
Apr 30, 2013, 01:12 ET
PORTLAND, Maine and CHERRY HILL, N.J., April 30, 2013 /PRNewswire/ -- TD Bank, America's Most Convenient Bank®, has announced results of its inaugural Mortgage Service Index, a nationwide consumer survey that included questions addressing the Hispanic home buying experience, attitudes toward obtaining a mortgage and Hispanic home owner's outlook on the housing market. The Mortgage Service Index found that Hispanic home buyers have had a less satisfying experience when buying their last home, yet are more likely to buy a home in the next year compared to the general population.
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The Mortgage Service Index, which was generated through a recent survey of more than 1,500 consumers who purchased homes within the last 10 years, was designed to assess opportunities and challenges during the home buying process, with a specific emphasis on the home financing process.
The Index found that Hispanic home buyers had a less satisfying buying experience than the general population. Forty-three percent of Hispanics had an "extremely" or "very stressful" experience when buying their last home, while only 24 percent of the general population felt the same stress levels during the home buying experience. In fact, nearly one quarter (23 percent) of Hispanics said the mortgage process prevented them from closing on time compared to 12 percent of overall respondents.
Despite more stressful home purchasing experiences, Hispanics have an optimistic outlook on home buying as indicated by the Index. It revealed that nearly one third (32 percent) of Hispanics are extremely or very likely to buy a home in the next year as compared to 18 percent of the general population. In fact, more than three quarters (80 percent) of Hispanics feel it is a good time to buy a new home.
"Our inaugural TD Bank Mortgage Service Index provided important mortgage industry insights on the fastest growing population in the United States," said Michael Copley, Executive Vice President, Retail Lending, TD Bank. "Overall, survey results indicate that Hispanics are eager to purchase a new home, but in order to reduce stress in the process and feel satisfied with the home buying experience, they will need resources that can provide increased communication and education throughout the process."
Lending Experiences Fall Short Reinforcing Need For Supportive Mortgage Partner
The Mortgage Service Index revealed that just over half of Hispanics (54 percent) found the process of getting approved for a mortgage to be "excellent" or "very good," while 67 percent of the general population rated getting approved for a mortgage the same. Additionally, more Hispanics turn to bank/lender websites (39 percent) as a source of information than the general population (34 percent).
The highest percentage of Hispanics (40 percent) said it took three to seven days for preliminary approval followed by 21 percent who received approval in one to two days and 17 percent who received approval in two weeks. Over one quarter of Hispanics (26 percent) said the length of the mortgage process from application to approval took three to four weeks while 23 percent said it took one to two months.
Personal Mortgage Process Differs
The in-person experience is very important to Hispanics. Nearly three quarters (70 percent) of Hispanics said they applied for their mortgage in person compared to the general population (65 percent). In addition, the study also found that only 16 percent of Hispanics have applied for their mortgage over the phone compared to the general population (21 percent). Interestingly, 14 percent of Hispanics applied for their mortgage online, while only 12 percent of the general population did so.
Regarding where they obtained their mortgage, more Hispanics used a bank/financial institution where they didn't have an existing account (43 percent) compared to those who obtained a mortgage with their primary bank/financial institution (38 percent).
Bank/Lender Expectations Met But Still Room For Improvement
In terms of the overall home buying process, the majority of Hispanics rated their lender as "excellent" or "very good" in the following aspects of interaction with their lender:
- Honesty and transparency (60 percent)
- Simplicity in obtaining a mortgage (56 percent)
- Helping them understand the entire mortgage process (54 percent)
- Explaining the mortgage and options available (52 percent)
- Providing easy to use online tools (51 percent)
The Mortgage Service Index found that these factors contribute highly to a buyer's perception of the overall home purchasing process.
The Mortgage Service Index also revealed several areas where improvements can be made to help increase Hispanic buyers' overall satisfaction with the mortgage lending experience, These areas included accessibility, responsiveness, and clarity of the home buying process. Fifty-seven percent of Hispanics found their lender accessible and 53 percent found them responsive compared to 62 percent of the general population and 61 percent respectively. Fifty-three percent of Hispanics believed their lender kept them informed throughout the process compared to 59 percent of the general population and 51 percent felt their lender had provided them with a greater sense of confidence throughout the process as compared to 57 percent of the general population.
Finally, while over half (62 percent) of Hispanics expected the mortgage rate they received, nearly one quarter (24 percent) said it was higher than expected compared to 18 percent of the general population.
"The TD Bank Mortgage Service Index demonstrates that Hispanic homebuyers expect their mortgage partner to be honest, accessible and straightforward throughout the home buying process," Copley said. "These are pillars of our legendary service platform at TD Bank and are some of the primary factors in a positive home buying experience."
The study was conducted among a nationally representative group of consumers from March 6 - 11, 2013. The sample size of 1,519 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.
SOURCE TD Bank
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