A recent survey has uncovered some disturbing – and often inaccurate – opinions homebuyers have about the mortgage industry.
Value Insured, a Dallas-based insurance company, surveyed 1,019 homebuyers. (While some interesting statistics emerged, I should note these statistics reflect the exact opposite of other much larger consumer surveys. See “Even in the Digital World, Consumers Want a Trusted Mortgage Advisor“.) Nevertheless, some of their perceptions were accurate; others reinforced common misconceptions; and yet other perceptions were dangerously far from the truth:
- 54% believed the mortgage industry lacked innovation and was essentially the same today as it was ten years ago.
It’s true that for many years after the 2008 crash, new and over-burdensome regulation has stifled industry innovation. But to say that the industry today is essentially the same as it was in 2008 is far from the truth.
Hundreds of additional regulations instituted since 2008 have dramatically changed the industry. There are far fewer mortgage lenders today than in 2008. And good, bad, or indifferent, most of the more unique and sophisticated loan products that were available ten years ago are extinct.
- 53% believed all mortgage lenders are basically the same; and 64% believed all lenders offered the same products.
It’s essentially true that most lenders offer basically the same products. The current hyper-regulated environment has reduced the “31 flavors” once available to simply, vanilla, chocolate, strawberry and mint chip. That said, it is certainly NOT true that all lenders are the same. Borrowers often find the bureaucracy of large lenders time-consuming and frustrating. The advice and competence received from one lender to the next varies significantly.
- 71% said they could care less about the loan officer or broker, thinking they could simply shop for the lowest rates and costs.
Mortgage rates themselves are a commodity. They are driven by the secondary markets, in a similar fashion that gasoline, gold, coffee, or wheat prices are driven by their commodity markets. When you drill down on a specific mortgage transaction, the rates available from ALL lenders will be similar. Since rates across all lenders should be comparable, why not work with someone you can meet, like, and trust?
- 63% believed they could soon close a mortgage without any help from a mortgage professional.
Despite the advertising hype coming from numerous national online mortgage companies, this is a very dangerous misconception.
When homebuyers shop online or call “their bank” for rates, can they obtain an accurate rate quote without the lender knowing specific details about the transaction? (The answer is NO.) Do they know how to navigate the common pitfalls, know when it’s prudent to lock their rate, or understand how their choices will affect their short-term and long-term wealth? Sadly they do not. Most people understand so little about the mortgage business that they often fall prey to internet scams and misleading promises.
Your mortgage and your home are likely
the most expensive and complex investments in your life.
Shouldn’t you seek help from a competent, qualified,
and Certified mortgage professional?
When working with Mortgage Wealth Advisors,
you’ll receive accurate information, valuable advice, and a concierge experience.
We’ll ensure your mortgage matches your needs,
complements your financial plans, and helps you attain your financial goals.
Your transaction will go smoothly and stress-free.
And you’ll receive the same low rates and fees
as if you shopped online or went to “your bank.”
Warren Goldberg is President of Mortgage Wealth Advisors, a Certified Mortgage Planning Specialist®, and a published author. His interviews include Blog-Talk Radio, Newsday, The Daily News, Anton Press, and the Long Island Herald. Since 1992, he’s been sharing his financial knowledge and wealth-building strategies, including how to properly use your mortgage as a financial tool. His clients regularly express their trust and appreciation by recommending friends and family call when in need of mortgage, real estate, and financial guidance.