Friday, May 25, 2012

What we know about you – mortgage consumers

The 2012 Mortgage Consumer Survey prepared by Canada Mortgage and Housing Corporation (CMHC) tells those in the mortgage industry a lot about you, the consumer – your buying habits, where you go to look for information, the kind of information you look for, etc.

The online survey was completed over February and March of 2012 by more than 3500 mortgage consumers who had completed a mortgage transaction in the previous 12 months. Here are few highlights of that survey:

Online Activity 
  •  When researching mortgage information, 71% of consumers went online; this is up from 65% in 2011.
  • Facebook was the most popular social media network used to gather information, especially among first time home buyers.
  • The two most actively searched items were interest rates at 86% and mortgage options at 73%.
  • And not surprisingly, 38% of 18 to 24-year-olds used mobile mortgage apps.

Using Professionals
  •  Consumers are turning more to mortgage professionals to help them with their mortgage decisions.
  • Consumers are asking a lot more questions about mortgages – 71% asked about differences between mortgage products; 67% wanted information about mortgage loan insurance; and 67% asked about penalty clauses.
  • Consumers like referrals and most referrals come from a family member or a financial planner.

The Mortgage Process
  • Before making a decision about a mortgage, consumers spend about five weeks doing research; first time home buyers spend  about eight weeks.
  • Consumers are now more prepared when meeting with their mortgage professional and come armed with a list of questions and the necessary documentation.
  • Eighty per cent of consumers felt confident they made the best decision with their mortgage product.

Mortgage Free
  • Thirty-one per cent of mortgage holders made lump-sum payments or increased their regular payments to pay off their mortgage sooner.
  • Nearly half of all buyers set their monthly payment higher than the minimum to pay off their mortgage sooner.

The survey findings are positive indicators that consumers are increasing their knowledge about financial matters. Four in ten home buyers went online and did a financial self-assessment. And a whopping 80% felt they had a good understanding about how much they could afford and what options were available to them.

Consumers who educate themselves about the financial options available will learn how to make consistent, informed financial decisions and that will help them to achieve their goals. This survey shows that Canadian consumers are on the right track.

The survey also makes clear that mortgage professionals are in a unique position to help educate consumers about their mortgage options and ways to pay off that mortgage sooner. 

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