January TD Bank Mortgage Service Index 2015

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1 January 2015 TD Bank Mortgage Service Index 2015

2 Overview To guide press and marketing strategies TD Bank conducted its third annual Mortgage Service Index. This survey focuses on understanding consumers home buying experiences and their attitudes and experiences on obtaining their mortgages. Methodology The total sample includes 2157 home owners who purchased their home in the last 10 years and have a mortgage. Specific segments of interest included in analysis are: Sample: 1456 New York City: 157 Boston: 150 Philadelphia: 152 : 159 : 501 : 100 : 100 The sample size of 1456 has a margin of error of +/- 2.6%. Data has been weighted by age, gender and region to reflect the populations. Fielded January 26 th February 2 nd This report presents the findings in summary charts and tables. The statistical cross-tabulations are reported under separate cover. Significance is tested at 95% confidence interval and is represented by circles: significantly higher significantly lower Last Time You Purchased A Home? Past 2 year home purchases has increased. Newly constructed homes are especially popular. Past Year 1-2 years ago 17% 13% 33% 28% 16% 15% Boston Philly 16% 16% 16% 11% 12% 15% 9% 21% 26% 20% 22% 17% 11% 21% 19% 24% 17% 14% 3-5 years ago 24% 28% 19% 23% 26% 21% 31% 40% 37% 27% 24% 6-10 years ago 42% 45% 46% 38% 40% 57% 36% 26% 29% 35% 36% 1. When was the last time you purchased a home?

3 Home Purchase Behavior First Time Home s Consistent with last year, one-half of buyers are first time home owners. 50% 49% Boston Philly 41% 67% 57% 65% 65% 75% 69% 100% 60% 50% 51% 59% 33% 43% 35% 35% 25% 31% 0% 40% Purchased Newly Home (First Owner) One-third of most recent home purchases were newly constructed homes. Incidence is higher in New York and among First Time s. Bostonians are least likely to be buying a newly constructed home. Boston Philly 32% 68% 31% 69% 33% 47% 13% 21% 41% 41% 61% 39% 100% 67% 53% 87% 79% 59% 59% 39% 61% 0% 68% Took out loan for construction 59% 72% 54% 66% 74% 72% 91% 80% 68% 4. Was this the first time that you had ev er purchased a home? 5A. Are you the first ow ners of your most recent home? 5B. Did you take out a loan for your homes construction?

4 Home Purchase Behavior Familiarity with Mortgage Affordability Programs Over one-half (54%) are familiar with Home Affordability Programs. First Time s and those who purchased newly constructed homes are most familiar. 2015, used for most recent purchase, did not use for most recent purchase 28% 29% 56% Boston Philly 23% 34% 22% 30% 37% 30% 56% 43% 47% 31% 30% 28% 24% 31% 32% 13% 21% 24%, not familiar 44% 46% 36% 50% 46% 31% 38% 31% 36% 29% Likelihood of Purchasing in Next Year Purchase likelihood has also increased up from 21% to 29%. Those who purchased a newly constructed home are most likely to be thinking about purchasing. Extremely likely Very likely Somewhat likely t very likely t at all likely 16% 9% 29% 12% 13% 14% 15% 21% 19% 37% 45% 21% Boston Philly 16% 23% 9% 14% 19% 13% 40% 26% 36% 12% 15% 14% 10% 24% 32% 26% 16% 18% 10% 20% 22% 14% 23% 19% 14% 16% 11% 25% 12% 25% 20% 14% 28% 10% 15% 11% 37% 29% 30% 43% 20% 7% 10% 26% 24% 19. Are you familiar w ith mortgage affordability/loan programs designed to help home buyers like yourself? 2. How likely are you to purchase a new home in the next year or so?

5 Market Perceptions Is it a Good Time to Buy A Home? Home buying confidence it up! 30% feel it is a very good time to buy a home. Very good time Good time Bad tim e Very bad time 30% 58% 20% 61% 10% 14% 3% 4% Boston Philly 28% 29% 29% 22% 32% 31% 46% 36% 49% 57% 57% 59% 66% 56% 51% 50% 53% 45% 13% 11% 11% 8% 10% 16% 1% 9% 4% 2% 3% 1% 3% 2% 2% 3% 2% 1% Housing Market in the Next 6 Months Up from this time last year, nearly one-half (46%) also feel that the housing market will improve over the next six months. Improve Stay the same Worsen 46% 42% 47% 51% Boston Philly 43% 42% 47% 48% 55% 52% 62% 50% 61% 54% 52% 48% 49% 38% 43% 34% 45% 36% 3% 5% 4% 4% 7% 5% 4% 4% 3% 7% 7% 6. Considering ev erything you hav e experienced, seen or heard w ould you say that it is a good time or a bad time for someone like yourself to purchase a new home? 7. Looking ahead 6 months or so, do you feel the housing market w ill improv e, stay the same or worsen?

6 The Home Buying Experience Rating of Most Recent Buying Experience Improving over last year, 68% feel their most recent home buying experience was very/extremely good. Excellent Very good Okay t very good t good at all 21% 16% 47% 68% 62% 46% 28% 34% 3% 4% 2% Boston Philly 20% 21% 18% 15% 24% 19% 34% 25% 36% 38% 42% 47% 48% 49% 64% 50% 44% 45% 31% 33% 33% 34% 24% 17% 11% 28% 17% 5% 4% 1% 3% 1% 0% 5% 2% 1% 5% 1% 1% 0% 0% 0% 0% 1% 1% Stress of Most Recent Buying Experience Overall, stress levels remain consistent. First Time Home s and those who purchased newly constructed homes feel more stress. Extremely stressful Very stressful Somew hat stressful t very stressful t at all stressful 13% 10% 20% 33% 20% 30% 39% 45% 22% 20% 6% 5% Boston Philly 10% 19% 10% 8% 12% 14% 16% 18% 24% 20% 22% 22% 25% 21% 22% 24% 26% 21% 40% 39% 48% 52% 46% 43% 43% 38% 30% 22% 13% 15% 14% 18% 14% 16% 14% 17% 8% 7% 4% 2% 3% 6% 0% 3% 8% 8.How w ould rate your most recent home buying experience? 9. Overall, how stressful was buying your most recent home?

7 The Home Buying Experience Experience with Specific Buying Aspects: Top2Box Excellent/Very Good Experience with specific elements remains consistent Boston Philly Finding a home 54% 57% 49% 43% 43% 48% 55% 51% 73% 55% 69% Finding a good realtor 59% 57% 49% 52% 60% 57% 57% 58% 69% 56% 60% Finding the right lender 57% 56% 44% 48% 53% 54% 50% 46% 69% 56% 67% Getting approved for mortgage 65% 66% 59% 58% 71% 65% 60% 62% 74% 62% 72% Home appraisal/ inspection process 56% 56% 57% 52% 60% 52% 57% 60% 68% 55% 66% Length of the entire home buying process 52% 51% 49% 44% 43% 45% 49% 47% 55% 52% 67% Most Recent Home Purchased: Primary 92% Boston Philly 91% 84% 91% 96% 91% 92% 84% 94% 90% Secondary Other 5% 3% 7% 11% 4% 2% 6% 2% 6% 3% 9% 3% 5% 5% 2% 3% 6% 10% 2% 2% Home Availability in Price Range Lots to Choose From 60% 65% 66% 50% 59% 69% 72% 80% 67% 78% 40% t a lot to Choose From 35% 34% 50% 41% 31% 28% 20% 33% 22% 10. How w ould you rate your experience w ith each of the follow ing aspects of buying a home? 8B. How w ould you describe your most recent home purchase? Is it 8D. At the time, did you feel that there w ere lots of homes to choose from in your price range?

8 The Home Buying Experience Time Spent Searching for Home On average, buyers spent about 6 months looking for their most recent home Boston Philly Up to 1 month 2-3 months 4-5 months 6 months or more 13% 33% 14% 39% 18% 10% 8% 13% 6% 2% 8% 10% 12% 32% 27% 22% 28% 28% 26% 16% 34% 33% 15% 15% 17% 10% 16% 16% 18% 17% 17% 34% 47% 52% 48% 50% 57% 58% 40% 38% 6.3 months on average Was 20% Put Down on Home Two thirds put at least 20% down on their home. Of those that did not, the average down payment was 5.6% and 28% paid nothing down % Boston Philly 63% 74% 69% 60% 72% 70% 91% 60% 82% 35% 37% 26% 31% 40% 28% 30% 9% 40% 18% 5.6% Average Put Down 28% Put 0% dow n 5.2% 7.2% 5.8% 6.9% 5.9% 6.0% 9.6% 5.2% 5.5% 8C. How long did you search for your most recent home before you purchased it? 8E. Did you put 20% or more dow n on your home? 8F. What percentage of your home s v alue did you put dow n?

9 Resources & Information Sources Used Sources of Information/Opinions s remain most likely to seek one-on-one information from realtors and lenders, however, the use of comparison/expert websites has increased. First Time s and those buying newly constructed homes are more active online (they skew younger in age). Boston Philly In person (branch) 45% 42% 34% 51% 45% 35% 54% 60% 64% 47% 50% Talked to realtor 44% 45% 48% 44% 45% 50% 54% 56% 53% 46% 37% Bank/lender websites 43% 40% 34% 54% 49% 46% 51% 55% 50% 51% 53% Friends/family 31% 28% 22% 38% 33% 28% 34% 36% 47% 38% 32% Comparison websites 23% 18% 18% 31% 24% 18% 28% 26% 31% 31% 36% Social media websites 10% 7% 5% 19% 5% 8% 15% 23% 20% 17% 24% Other 4% 5% 8% 2% 1% 3% 1% 2% 1% 1% 4% Did not seek info 9% 11% 13% 10% 8% 10% 4% 3% 1% 6% 7% Most Valuable Resource During the Process Realtors are the most valuable resources during the process. For those buying a newly constructed home 25% say their financial institution is most valuable. Realtor Financial Institution Mortgage Lender Mortgage Loan Officer Mortgage Broker 14% 12% 6% 5% 55% Boston Philly 56% 45% 62% 64% 55% 49% 37% 51% 39% 11% 19% 12% 7% 18% 19% 32% 18% 25% 10% 16% 8% 15% 15% 15% 18% 13% 17% 4% 5% 6% 7% 6% 9% 9% 7% 5% 9% 5% 4% 1% 3% 4% 1% 5% 5% 12. Where did you go for information or opinions on the products and/or serv ices offered by each bank/lender you considered? 10B. Who or w hat w as your most v aluable resource during the home buying process?

10 The Bank/Lender Experience Where Mortgage Was Obtained More buyers have gone with their primary institution for their most recent mortgage. Primary FI New FI Other FI Dealt w ith Other 42% 37% 41% 45% 13% 12% 5% 6% Boston Philly 37% 52% 39% 31% 58% 57% 77% 50% 58% 46% 31% 43% 48% 24% 22% 16% 35% 26% 11% 15% 13% 15% 13% 18% 7% 13% 13% 6% 2% 4% 5% 4% 3% 3% 4% Method of Application In Person 67% 65% Boston Philly 63% 77% 63% 58% 77% 77% 89% 74% 76% Telephone 20% 23% 25% 15% 22% 23% 13% 14% 8% 14% 12% Online 14% 13% 11% 8% 14% 19% 10% 9% 4% 12% 12% 2015 Mortgage Process: 31.8 Days For 18% Process Impacted Closing On time 2014 Mortgage Process: 34.6 Days For 15% Process Impacted Closing On time 2015 Number of Banks Considered: Number of Banks Considered: At which bank/financial institution did you obtain your mortgage? 16. How did you apply for your mortgage? 13. How long was the entire mortgage process, from applying for your mortgage to the time that you were approved for your mortgage and could close on your home? 14. Did the mortgage process prevent you from closing your home on time? 11. How many banks/lenders did you consider when thinking about applying for your mortgage?

11 The Bank/Lender Experience Rating of Bank/Lender Experience Overall experience with the bank/lender is consistent with this time last year. That said, buyers feel their bank has improved in areas of accessibility and honesty, as well as keeping things simple and giving confidence. Excellent Very good Okay t very good t good at all 28% 25% 72% 69% 43% 44% 23% 25% 4% 4% 2% 2% Boston Philly 22% 22% 24% 27% 30% 31% 45% 28% 38% 43% 41% 45% 44% 46% 53% 38% 45% 43% 26% 28% 28% 23% 22% 15% 14% 23% 14% 6% 4% 3% 4% 1% 1% 3% 2% 3% 3% 5% 0% 1% 1% 0% 0% 1% 1% Experience with Process: Top2Box Excellent/Very Good Responsiveness Accessibility Mortgage rate/terms Easy to use online tools Gave me confidence Made it simple Helped me understand Kept me informed Explained options available Was honest and transparent 64% 67% 62% 52% 63% 60% 61% 62% 60% 64% 61% 63% 59% 51% 58% 56% 58% 59% 58% 60% Boston Philly 57% 58% 65% 66% 68% 72% 74% 63% 71% 59% 60% 67% 61% 68% 76% 78% 66% 72% 57% 55% 58% 59% 58% 63% 70% 61% 70% 39% 47% 54% 52% 58% 70% 67% 55% 64% 53% 57% 57% 58% 62% 63% 72% 64% 75% 51% 53% 53% 56% 62% 57% 74% 60% 67% 46% 59% 58% 58% 63% 73% 69% 61% 71% 50% 58% 60% 65% 61% 74% 72% 60% 69% 50% 60% 61% 55% 65% 70% 73% 61% 72% 50% 59% 63% 62% 65% 77% 80% 63% 72% 17. Overall, how would you rate your experience w ith the bank/lender from w hich you obtained your mortgage? 18. How w ould you rate your bank/lender on each of the follow ing?

12 The Bank/Lender Experience How Banks/Lenders Can Better Educate on the Mortgage Process While the majority of buyers feel they have enough resources, banks could offer more online information and front line training. Boston Philly Provide more relevant, helpful information online Train loan officers to clearly explain loan options Offer home financing seminars / workshops 40% 51% 49% 47% 58% 44% 45% 62% 63% 72% 58% 60% 50% 57% 52% 45% 52% 49% 52% 50% 48% 28% 49% 41% 46% 50% 49% 47% 52% 50% Other 3% 3% 3% 1% 3% 1% 2% 2% 2% ne of the above 16% 19% 9% 13% 16% 4% 2% 2% 10% 12% 86% - enough resources to educate them on the process 81% 86% 87% 89% 85% 90% 90% 82% 89% Negative Events Impacting Most Recent Home Decision One quarter feel that home inventory was an issue during their most recent purchase. Inventory/availability of homes 24% Boston Philly 20% 24% 24% 20% 23% 26% 34% 31% 34% Knowledge/confidence on financing process 20% 14% 27% 15% 13% 22% 19% 21% 31% 34% Mortgage rates 18% 14% 28% 13% 16% 21% 19% 16% 25% 27% n-mortgage debt 15% 14% 19% 8% 14% 17% 18% 14% 19% 19% Access to credit 10% 8% 12% 8% 15% 14% 8% 10% 13% 11% ne of the above 51% 55% 44% 55% 52% 40% 50% 34% 36% 41% 18B. How can banks/lenders better educate you on the mortgage process? 20 Did any of the follow ing negativ ely impact your most recent home purchasing decision?