The majority of homebuyers close their loans within four weeks or less, and a more digital mortgage process is likely one reason they do, a recent TD Bank survey finds.
“When borrowers leverage online platforms for providing documents and completing necessary forms, we have found it reduces information intake time by more than 60% on average,” Rick Bechtel, head of U.S. residential lending for TD Bank, said in a press release.
An efficient automated process also may account for why almost one-third of borrowers consider the home buying experience “excellent,” and a similar share of homeowners are “very or extremely likely” to buy a home in the next three years. More than 20% apply for mortgages online.
But nearly one-third of borrowers still find that purchasing and financing a house is “very or extremely stressful” because the process remains difficult to understand without help.
Only 18% of consumers are confident they have enough resources to educate themselves on the process, and the lack of educational resources appears to be reflected in homebuyers’ financing choices.
Nearly three-quarters of respondents took out 15- or 30-year loans even though more than half of those surveyed indicated they had plans to move in 10 years or less.
Also, the fact that 40% of consumers indicated they lack knowledge about affordability programs may have played a role in why 36% make traditional down payments of 20% or more.
“Today, homebuyers can search online for the basics of the mortgage process, leading to remarkably more informed borrowers than we saw even a decade ago. But the reality is home buying requires navigating financial options, legal obligations, local guidelines and complex processes that occur on tight timelines,” said Bechtel. “It’s up to mortgage bankers to provide borrowers with expert, personalized guidance to reduce stress and create clarity.”
The survey’s results are based on data collection done by consumer research firm Maru/Matchbox. The company surveyed a nationally representative sample of more than 1,800 consumers for TD Bank between April 2 and April 17. All respondents purchased a home in the last 10 years.