In April 2015, the Canadian Mortgage and Housing Corporation (CMHC) surveyed 788 first-time buyers from all across the country who had undertaken a mortgage transaction in the previous year. The results of the survey were recently released, so let’s take a tour of the results:
Online Mortgage Research
A large majority of First-Time Home Buyers (83%) gathered information about mortgages online. 53% of researchers went to a lender site and 31% visited a broker site. In order to reach one of these two types of sites, 70% uses an internet search engine and 66% used a referral from a friend or family member.
Many First-Time Home Buyers performed some form of mortgage shopping online, on top of their research. 71% contacted a lender or a broker to learn about their mortgage options, and 32% made use of both. Only 56% considered more than one single mortgage offer before accepting one, but 53% did manage to negotiate a better interest rate than the one they received on the original offer.
A large number of First-Time Home Buyers (55%) arranged their financing through a mortgage broker. The desire to get the best rate was the driver for contacting a broker. 57% of broker users indicated that getting the best rate had a great deal of influence on their purchase decision. 44% percent of First-Timers received a recommendation to use a specific mortgage broker, and 79% of those people wound up using said broker. Real estate agents made up 36% of these recommendations.
Most First-Timers (78%) were satisfied with the service provide by their mortgage professionals. Mortgage brokers received the highest rating, as 43% “totally agreed” and 35% “somewhat agreed” that they were satisfied. 43% of mortgage broker users “totally agreed” that they would use the same broker for their next mortgage as well, which is also the highest rating.
First-Time Home Buyers have a lower understanding of mortgage options, so as a result, they are not as confident as Repeat Buyers. Only 34% of First-Timers “totally agreed” that they received the best mortgage deal for their needs, and 37% “totally agreed” that they had a good understanding of the whole mortgage process. A high number (55%) also had concerns about the home buying process, with 58% of those people mentioning unforeseen expenses as their main concern. This is mainly because 38% of First-Time Home Buyers actually did incur unexpected expenses, with 40% of those being adjustments, 37% of those being immediate repairs and 31% being lawyer fees.
Speak with your Ottawa mortgage advisor if you have any questions about the results, or join the conversation on social media using #firsttimebuyers.