Bruce Gehrke (pictured top), senior director of wealth and lending intelligence at JD Power, said borrowers don’t believe the process is as easy as it used to be, largely due to the current market headwinds.
“You have the affordability challenges, you have the restricted supply out there, multiple offers, bidding wars, and things of that nature,” Gehrke told Mortgage Professional America. “Consumers have this perception going in that this wasn’t as simple as it was once before, where you just kind of walk in, find the house you want, put down an offer, go back and forth, and you’re ready to close.”
More complications
Buyers in the survey don’t perceive the mortgage process as easy as it once was, and they’re approaching a broker or originator with many more questions about how their finances will be affected.
“Now you have this perception that there are more complications involved,” Gehrke said. “I want to know more about the affordability issues. What can I afford? Not just what will I qualify for, but what fits into my lifestyle? And we see differences across demographics, especially among younger borrowers. They’re not as willing, in some cases, to spend as much on housing relative to their income.”
Gehrke believes the younger generation of buyers has more places where their expendable income is going, compared to previous generations who might tighten discretionary spending in order to afford a home payment.
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