A recent study conducted in the U.S discovered one-third of Americans would consider a WalMart mortgage if the retailer started offering the product. The poll, conducted by Carlisle & Gallagher Consulting Group, is a lighthearted survey because as we know there is no such thing as a WalMart mortgage; however, it sheds light on the eagerness of Americans to find alternative lenders. It also highlights how consumers are more willing to secure their loan somewhere other than a traditional bank. Almost half of the more than 600 respondents also said they would consider mortgage from the online site PayPal.
Here are the survey results:
- 80 per cent of U.S. consumers would consider a mortgage from a non-bank
- One in three consumers would consider a mortgage from WalMart
- 48 per cent would consider a mortgage from PayPal
Alternative Lending in Canada
So how do Canadians feel about a major retailer offering a mortgage? It’s hard to tell but Canadians would benefit from having more mortgage providers to choose from, both in the form of traditional banks and alternative lenders. When it comes down to it, Canadians shopping for mortgages want to get the lowest rate possible; the more providers available, the better those rate will be. Credit union mortgage are also an alternative – and because they’re provincially regulated, they’re not subjected to the same mortgage policy changes that affect the big banks.
What Are The Concerns?
When it comes to alternative lenders, which a WalMart mortgage would be, there is always concern about the rules and regulations surrounding the terms of the mortgage agreement. Both lender and borrower should do a through background check to ensure the mortgage relationship they are forging is right for them. There is also concern that alternative lenders dilute efforts by the Federal government to cool the housing market and rein in debt.
Would you Consider a Wal-Mart Mortgage?
This may be a theoretical question, but there are several choices non-bank mortgage providers in Canada, including Advent Mortgages, Verico Butler – even President’s Choice! Canadian Tire offered mortgages for some time before it decided to get out of the lending business in 2009.
Consumers Are Confused by the Mortgage Process
The survey conducted in the U.S found despite consumer satisfaction with banks ranking high at 81 per cent, continued frustrations with mortgage processes could drive consumers to alternative home loan providers.
- High interest rates, high payments, and taxes and escrow are the top three most frustrating issues regarding consumers’ current mortgages.
- 56 per cent of consumers blame slow execution as one of the most painful aspects of the mortgage process.
- 32 per cent said it was difficult to communicate with their lender.
- 31 per cent said they were unable to track the status of their mortgage application.
- 26 per cent said they received untrustworthy advice.
Since the economic crisis in 2008, consumers have been looking for alternatives ways to save, borrow and invest their money. Although a WalMart mortgage has yet to exist, the survey indicates a clear signal from borrowers that they want more choice and they want to borrow money at the best rate possible – and they’re ready to consider their options.