In our last FREEandCLEAR Mortgage Survey post we discussed how less than one in five borrowers learn about the mortgage process in high school or college. If borrowers are not learning about mortgages in the classroom, where are they learning? It turns out, most borrowers are turning to the Internet, their lender and real estate agents to understand how mortgages work.
According to the FREEandCLEAR Mortgage Survey, when we asked borrowers “from what source have you learned the most about the mortgage process”, the Internet and Lender tied for the top response, with both options garnering 24% of responses. Realtor / real estate agent came in third, with 15% of responses as they continue to play an important, albeit secondary role, in the mortgage education process . Not surprisingly, school only attracted 5% of responses, reinforcing our prior findings about how the education system fails mortgage borrowers.
It is also notable that only 2% of mortgage borrowers selected the Consumer Finance Protection Bureau (CFPB) as the source from which they have learned most about the mortgage process. In fairness, the CFPB was established relatively recently which may help explain its lack of awareness or usage among borrowers in our survey. Despite this, 2% is still a very low portion of responses in light of the CFPB’s significant resources and support. While the CFPB can be a political lightning rod, it does offer a wide range of educational resources for prospective mortgage borrowers.
The results of the FREEandCLEAR Mortgage Survey illuminate several interesting points about how borrowers learn about mortgages. First, more borrowers are turning to the Internet to research mortgages. We expect this trend to grow over time as more millennials enter the home buying market. Although the Internet can be an inconsistent information source, it is positive that borrowers have more free mortgage tools and resources available to them.
Second, borrowers continue to rely on their lenders to learn about the mortgage process. While this finding seems somewhat obvious it raises issues about objectivity and potential conflicts of interest between lender and borrowers. Turning to a lender for mortgage education works with qualified, ethical lenders but borrowers working with less established or experienced lenders may be disadvantaged. Additionally, borrowers who consult multiple lenders are more likely to make informed mortgage decisions.
Finally, the FREEandCLEAR Mortgage Survey showed that 30% of borrowers learned about the mortgage process from “Other” sources, underscoring the myriad methods that people use to learn about mortgages.
It is clear from our survey results that borrowers use numerous resources to learn about the mortgage process. Whether they use the Internet, lenders, realtors or a government agency, the most important point is that borrowers seek to learn about mortgages and borrower education improves over time. Educated borrowers makes more informed mortgage decisions which benefits all mortgage process participants.
We will continue to provide a detailed analysis of each survey question on our blog in the coming weeks and you can review the full results from the FREEandCLEAR Mortgage Survey to better understand how borrowers think about and experience the mortgage process.