Lending The Ticker

Ally Bank to mortgage lenders: Gotta spend money to make money

Study reveals what borrowers really look for when lender shopping

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A recent study conducted by Ally Bank shows interest rates are the most important factor to consumers when deciding on a lender.

Ally’s study was conducted online by Harris Poll from March 28-30 and gathered responses from more than 2,000 U.S. adults in an effort to understand preferences when choosing a mortgage lender.

The study found that 98% of those surveyed noted interest rates as an important factor in their decision of which lender to choose, followed by 96% saying closing costs as very or somewhat important to the decision, while 93% of respondents said a reputation for excellent customer service and convenience was also an important factor in the decision.

The survey also reports that four in five respondents (81%) who ever had a mortgage or plan to apply for one in the future said the total amount of closing costs did, or would, play a part in deciding on a lender.

The survey also showed that same percentage asking “what’s in it for me?” with 81% saying that a $500 incentive would be very or somewhat influential to their selection of a lender. This finding supports a current promotion by Ally Home offering applicants a $500 savings discount on closing costs when they complete an application by April 30 and close a loan with Ally Home Loans.

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(Source: Ally Bank)

“We are very excited to be expanding our product suite at Ally Bank, and with the spring home-buying season ramping up, we believe the $500 promotion, along with competitive interest rates and exceptional service, is a great way to help our customers with their home financing needs,” said Diane Morais, president of consumer and commercial banking products for Ally Bank.

Ally Bank launched Ally Home Loans in December 2016 to meet growing customer demand for a mortgage product. By offering direct-to-consumer mortgages online, customers receive personalized assistance from Ally’s dedicated loan experts.

The survey also showed that of those who have ever had a mortgage, a little more than a third (37%) were very satisfied with the mortgage application process, while 15% were not satisfied. The study also shows 48% of those who were not satisfied with the process cited poor customer service as the reason, while 46% said it was due to poor communication from their lender. In addition, 29% cited closing costs and 24% said interest rates were too high.

 

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