Why Buyers Regret Choosing Their Lender

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Twenty-one percent of customers purchasing a home regret their choice of a lender, according to the J.D. Power 2016 U.S. Primary Mortgage Origination Satisfaction Study, based on responses from more than 5,000 consumers. When it comes to first-time buyers, 27 percent say they regret their choice.One reason for customers' regret overall is a poor experience, including a lack of communication and unmet promises.

Some buyers also said they felt pressured to choose a particular mortgage product, and they made up their mind due to financial reasons, such as a lower rate offered. As a result, dissatisfaction with the mortgage process doesn't necessarily mean it cost these borrowers more money.

"This 'happy buyer's remorse' is in part due to customers feeling that circumstances out of their control drove them to a particular choice and that options weren't totally clear," says Craig Martin, director of the mortgage practice at J.D. Power. "Like a lot of consumers, they are happy with a good deal, but they can feel that they have to jump through hoops to get the deal. In the end, they may not fully understand exactly what they got, and the longer-term risk for lenders is that customers' perceptions of the deal may change in the future."

Overall, Quicken Loans ranked highest in primary mortgage origination satisfaction for the seventh consecutive year. Quicken Loans performed highest in the application/approval process, interaction, loan closings and loan offerings. CitiMortgage was number two on the list, followed by Ditech Financial.

J.D. Power offers the following tips to mortgage shoppers to help increase their satisfaction with the process:

1.  Plan ahead and research mortgage options. Customer satisfaction of those who already investigated mortgage options before their home search was 92 points higher than those who waited until after they found a home.
2.  Gather more than one quote. Thirty-two percent of customers who received just one quote had a satisfaction score that was 19 points lower than those who gathered multiple quotes from lenders.
3.  Select on merits. Don't just choose a lender based on price or affiliation. Customers who chose a lender mostly due to a price/rate or on a recommendation from someone else, like a real estate professional or builder, were significantly less satisfied with their choice than those who based their selection on other reasons.

Source: "2016 U.S. Primary Mortgage Origination Satisfaction Study," J.D. Power (2016)