A decade ago, homebuyers tended to pick out their dream home and then look into financing.
But these days, the buying process has significantly changed.
The vast majority of buyers have flipped that process. Now about 74 percent of house shoppers are looking at their financing options first, then picking a home that appears to fit their mortgage alternatives, according to a recent survey from LoanDepot and mellohome. In fact, about 9 out 10 first-time homebuyers take this route, according to researchers.
What Homebuyers Want in a Mortgage
How homebuyers evaluate their financing options is changing as well.
What homebuyers are seeking when they evaluate their financing options is changing as well. For example, homeowners used to focus on whether they could get the loan volume they needed to finance their purchase. The new study indicated, however, that consumers are placing a higher value on “greater speed, simplicity, and communication from their providers.
The study “emphasizes how customers are changing their approach to homebuying” said Chris Heller, CEO of mellohome.
“10 years ago … they relied on a real estate agent to drive the entire process,” Heller said. “Now, the customer is taking charge and doing a lot of groundwork before they even get an agent involved.”
A big driver for this behavioral shift is likely the highly competitive housing market, he added.
“With the lack of inventory we’ve seen in recent years, it’s especially important to be armed with a preapproval when that perfect home appears,” Heller said.
More Home-Related Stress Leads to Anxious Buyers
The study also indicated that more homebuyers are experiencing significant levels of stress associated with their home purchases. For example, nearly 67 percent of respondents reported “finding the right home” was a struggle. The “overall home loan experience” was the second largest stressor, followed by coordinating paperwork.