Some lenders have turned mortgage rate challenges into an opportunity to play a more hands-on advisory role with customers, according to a recent survey by J.D. Power. This, survey authors noted, has earned some lenders high marks for customer satisfaction along the way.
Despite a September interest rate cut by the Federal Reserve, the average 30-year mortgage rate in the United States has been on the rise during the fourth quarter, reaching 6.9% this month, its highest level since August. Persistently high rates, combined with steadily rising housing prices, have put a strain on mortgage customers, survey authors noted.
“The variability in rates and higher costs for buyers increases the importance of understanding consumers’ individual situations,” said Bruce Gehrke, senior director of wealth and lending intelligence at J.D. Power. “Consistently, we’re seeing that lenders that play an active advisory role in helping their clients navigate the current market are earning significantly higher customer satisfaction, loyalty and advocacy scores than those that are treating mortgage lending as a transactional process.”
Overall satisfaction has declined following a sharp increase in 2023, the survey reported. Overall customer satisfaction with mortgage lenders is 727 (on a 1,000-point scale), down 3 points from a year ago when mortgage customer satisfaction surged 14 points year over year. In the past year, mortgage lenders have noticeably trimmed their staffing levels, making it more challenging to deliver the same level of highly personalized customer service that drove the gains in customer satisfaction a year ago.
According to survey findings, Interpersonal relationships with local brand reps are critical to satisfaction. The only factor showing gains in this year’s study is people, which has risen by a single point. The factors showing the biggest year-over-year declines in customer satisfaction are digital (-8 points); communication (-5); and loan offering met my needs (-5). In fact, when local brand representatives are directly involved in the mortgage origination process, overall satisfaction rises 40 points.
Lenders who become advisors were important for navigating a tough market, respondents said. Lenders that actively advise clients throughout the lending process drive significantly higher customer satisfaction scores. The satisfaction score for trust among borrowers who strongly rely on the lender’s expertise to get through the borrowing process is 133 points higher than among those borrowers who do not strongly rely on the lender’s expertise.
Overall satisfaction is 41 points higher when lenders engage early with customers, connecting with them when they are first thinking about purchasing a home, compared with overall satisfaction when lenders get involved once customers are actively shopping. Satisfaction is 107 points lower when lenders get involved at the time customers are getting ready to apply for a mortgage.
The survey measured customer satisfaction in six areas: communication; digital channels; level of trust; loan offering meets my needs; made it easy to do business with; and people. The 2024 study is based on responses from 7,534 customers who originated a new mortgage or refinanced within the past 12 months.
