National survey illustrates homeowners' desire for complete, transparent
mortgage and home loan cost options
CALABASAS, Calif., July 23 /PRNewswire/ -- Countrywide Home Loans today
unveiled a broad national initiative designed to educate mortgage consumers
about the fact that they have many options available to them regarding how
certain costs are paid when refinancing or obtaining a home loan, no matter
which mortgage lender they choose. Countrywide is arming its more than
9,000 loan officers and mortgage sales force with new and improved tools,
such as specialized mortgage cost calculators, that will allow them to
thoroughly and transparently show customers cost-effective choices for
structuring their home loan packages.
To understand how strongly consumers feel about the issue of choice
versus a one-size-fits-all mortgage, Countrywide commissioned a national
survey of more than 2,280 homeowners. The results show that the majority of
respondents (76%) strongly agreed that they wanted to be informed by
mortgage lenders about as many closing cost choices as possible in order to
arrive at a decision best suited to their individual circumstances. Other
findings include:
-- Of those surveyed, 69 percent strongly agreed that they are more likely
to trust a mortgage lender who is open and honest about the many
options available to them given their individual situation.
-- When U.S. homeowners were asked their level of agreement with the
notion that the way in which closing costs are paid should be tailored
to the individual based on the borrower's unique set of circumstances:
87 percent strongly agreed or somewhat agreed.
-- Nine out of 10 U.S. homeowners agree that there is really no such
thing as a mortgage without fees.
-- Three of five U.S. homeowners (61%) indicated strong agreement with the
idea that "one size fits all" mortgages aren't necessarily the best
option for everyone.
"People clearly understand that there will be costs when they finance a
home," said Dan Hanson, managing director of Countrywide. "Home buyers look
to us for information, so we've decided to recommit ourselves to educating
people about the cost options that work best for their unique situations.
By presenting our customers with a menu of options, they can make an
informed choice that's right for them now and into the future. And, the
best choice in the long run isn't necessarily the one with the least
out-of-pocket costs, but rather the one that brings the best total value
over the life of the loan."
According to Hanson, one size most definitely doesn't fit all. The
right home loan choice can be radically different from one buyer to the
next. For example, a young couple with a growing family has tremendously
different financial circumstances than a couple buying a home for
retirement. As part of the It's Your Choice campaign, Countrywide will
advise customers about their mortgage cost options, including choices such
as:
No money needed for closing costs
A mortgage lender can pay your closing costs. In this scenario, the
lender does not require cash from the borrower to pay fees at the closing
table. Instead, the home buyer obtains a loan with a slightly higher
interest rate. It can be a smart move for buyers who have little money set
aside or who plan to be in a home for a short time because their savings in
closing costs can often more than offset their increased interest expense.
Reap the rewards of lower interest when you pay closing costs upfront
Buyers who pay loan costs at closing are rewarded with a lower interest
rate on their mortgage. A customer who is planning on staying in their home
for more than a few years may see the benefit of selecting to pay the costs
at closing and having a lower interest rate to help them save over the long
term.
Minimize your mortgage interest rate
Some homeowners may benefit from paying loan discount points to lower
their interest rate. By paying loan discount points, buyers can "buy down"
their mortgage interest rate, a particularly attractive option if the buyer
intends to retain the mortgage for more than five years.
Mix it up
A combination of a first mortgage and a second mortgage is yet another
choice. This option allows many homeowners to avoid private mortgage
insurance and enables them to pay down the second mortgage separately. If
the second mortgage is a home equity line of credit, borrowers may reuse
the available credit in their line as they pay it down.
No monthly mortgage insurance payments
In most instances, private mortgage insurance is required when a
borrower is unable to make a down payment of 20 percent or more. There are
different types of mortgage insurance available to borrowers. A borrower
may accept a slightly higher interest rate or pay additional points at
closing to avoid paying monthly premiums. All of these options may have
some tax advantages, so borrowers are encouraged to consult their tax
advisor to learn if they qualify for a tax deduction and the different
rules that apply to purchase and refinance transactions.
These are just a few of the many scenarios that can suit a homebuyer's
very unique situation. "Some of these options can be combined to make the
final result a thoroughly customized solution, a far cry from the
one-size-fits-all approach," said Hanson.
As with any financial decision, home buyers and owners should carefully
evaluate their options and fully understand the advantages and
disadvantages before making a choice.
"Our new It's Your Choice initiative further distinguishes Countrywide
when it comes to home loans," said Hanson. "People know they have choices,
so our job is to make sure we put them all on the table and share our 37
years of home loan expertise with the customers who trust us every day."
About the Survey Methodology
This survey was conducted online by Harris Interactive on behalf of
Countrywide Home Loans among 3,435 adults (aged 18 years and older) within
the United States between June 13 and 15, 2007, among whom 2,280 were
homeowners. Figures for region, age within gender, education, household
income and race/ethnicity were weighted where necessary to bring them into
line with their actual proportions in the population. Propensity score
weighting was also used to adjust for respondents' propensity to be online.
With a pure probability sample of 3,435 one could say with a
ninety-five percent probability that the overall results have a sampling
error of +/- 3 percentage points. Sampling error for subsamples is higher
and varies. However that does not take other sources of error into account.
This online survey is not based on a probability sample and therefore no
theoretical sampling error can be calculated.
Countrywide Home Loans, Inc., a member of the Countrywide(R) family --
America's #1 home loan lender -- (as ranked for 2006 by Inside Mortgage
Finance, Feb. 2, 2007, Copyright 2007), originates, purchases, securitizes,
sells and services home loans and is the primary subsidiary of Countrywide
Financial Corporation (NYSE: CFC). Countrywide Financial Corporation,
through its subsidiaries, provides mortgage banking and diversified
financial services in domestic and international markets. Founded in 1969
and a member of the S&P 500 and Fortune 500, Countrywide Financial
Corporation is headquartered in Calabasas, California and its family of
companies has a workforce of more than 50,000 in over 900 offices across
the country. http://www.countrywide.com
About Harris Interactive
Harris Interactive is the 12th largest and fastest-growing market
research firm in the world. The company provides innovative research,
insights and strategic advice to help its clients make more confident
decisions which lead to measurable and enduring improvements in
performance. Harris Interactive is widely known for The Harris Poll, one of
the longest running, independent opinion polls and for pioneering online
market research methods. The company has built what it believes to be the
world's largest panel of survey respondents, the Harris Poll Online. Harris
Interactive serves clients worldwide through its United States, Europe and
Asia offices, its wholly-owned subsidiaries Novatris in France and
MediaTransfer AG in Germany, and through a global network of independent
market research firms. More information about Harris Interactive may be
obtained at http://www.harrisinteractive.com.
To become a member of the Harris Poll Online and be invited to
participate in online surveys, register at http://www.harrispollonline.com.
SOURCE Countrywide Home Loans, Inc.
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Related links:
http://www.countrywide.com
CONTACT:
Countrywide Home Loans, 800-796-8448,
pressroom@countrywide.com
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