Homeowners want sophisticated loan products, survey saysMortgagePress.comResidential mortgage loans
What U.S. homeowners look for in a mortgage loan and what they
want to achieve through home financing may be two very different
things, according to a new survey sponsored by Thornburg Mortgage
Inc., a single-family residential mortgage lender focused
principally on the jumbo segment of the adjustable rate mortgage
market. While most mortgage originators would not be surprised to
learn that homeowners looked for lenders that offered a traditional
fixed rate term (71 percent) and competitive rates (65 percent),
what was enlightening was that homeowners expressed a strong
interest in loan products that offered more sophisticated features,
such as loan modification options, pledged asset loans, and
assumable and portable mortgages. The survey was conducted from
June 16 22 among a national probability sample of 1,162 adult
homeowners (568 men and 594 women).
The nationwide survey revealed that when homeowners were given a
description of how a loan product functions, in most cases, the
majority of them indicated that they would use a mortgage that
offered those options. For example, when the survey participants
were asked if they would ever use a loan product that let them
change the terms of their loan without refinancing, a loan
modification option typically offered by portfolio lenders, almost
three-quarters of all homeowners (74 percent) indicated that they
would. Nearly six in 10 homeowners (59 percent) indicated that they
would use a loan that let them transfer their current mortgage to a
new property, e.g., a portable mortgage; and 56 percent of
homeowners indicated that they would use a loan option that let
them transfer their current mortgage to a buyer—an assumable
mortgage. Additionally, one in four homeowners said that they would
use a pledged asset loan, a mortgage product that let them use
stocks and bonds in lieu of a down payment.
"It used to be common wisdom that if a mortgage originator
offered a traditional, 30-year, fixed-rate mortgage with a
competitive interest rate, the clients would be ripe for the
picking; but according to this survey, that's clearly not the
case," said Thornburg Mortgage's Senior Executive Vice President
and Chief Lending Officer Joseph Badal. "Many of today's homeowners
have a sophisticated perspective on money and they are interested
in loan products that help them achieve their financial goals,
which could include more than financing their home—even if
they may not know what specific products to ask for."
Badal's conclusions were further supported by the survey, which
reflected that when homeowners were asked if they understood
specific mortgage products by name, many didn't. Only 21 percent of
homeowners believed they understood what a loan modification was.
Less than two in 10 homeowners (18 percent) said that they
understood portable mortgages, and 15 percent understood pledged
asset loans.
Badal added, "What's clear from this survey is that in today's
competitive marketplace, mortgage originators that take the time to
explain how specific loan products work and how those products can
benefit individual borrowers are the lenders that are most likely
to grow their origination business."
For more information, visit www.thornburgmortgage.com.
