New ClosingCorp Survey Finds More Than 50 Percent of Homebuyers Are Still Surprised by Closing Costs

SAN DIEGO–(BUSINESS WIRE)–ClosingCorp,
a leading provider of residential real estate closing cost data and
technology for the mortgage and real estate services industries, today
released the findings of a new national consumer survey of recent
homebuyers that explored whether the year-old TILA-RESPA Integrated
Disclosure (TRID) rule has helped consumers better understand the
closing costs associated with purchasing a home.

Wilson Perkins Allen Opinion Research, on behalf of ClosingCorp,
surveyed 1,000 first-time and repeat homebuyers who had purchased a home
between January 1, 2016 and January 1, 2017. Here are some of the
findings:

• When asked what surprised them about their closing costs, 17 percent
  of all homebuyers were surprised costs/fees were even required and 35
  percent of all homebuyers were surprised that their costs/fees were
  higher than expected.
• However, 31 percent of homebuyers were not surprised at all about
  their closing costs because their loan estimates and closing fees
  matched.
• The top five closing costs that most surprised homebuyers were:

• 58 percent of those surveyed said that their initial loan estimates
  had changed or been revised prior to closing. Most of the buyers (67
  percent) who received a revised estimate were located in the
  Northeast; and 63 percent had home values between $500,000 and
  $1,000,000.
• When asked which fee estimates were changed, the top three answers
  were: closing costs (12 percent); insurance costs (6 percent); and
  taxes (5 percent).
• According to the homebuyers, the most common reasons for the changes
  in the closing costs were a change to the loan based on what they
  qualified for (31 percent); the lender estimate was not accurate (27
  percent); and there was a change to the loan based on their request
  (23 percent).
• 72 percent of homeowners said their loan estimates and closing
  disclosures were delivered electronically. Interestingly, the vast
  majority of these homeowners (72 percent) fell into the Millennial age
  range of 18-34 years old.
• Half of all homebuyers (50 percent) selected their title company. Of
  those who did not select their own title company, 35 percent said
  their realtor selected it for them, suggesting that realtors have more
  influence since they are the homebuyers’ first touch point.

“As more and more Millennials become first-time homebuyers, TRID or Know
Before You Owe has made it easier for them to understand the costs and
fees they’ll face at closing. Yet there are still surprises during the
closing process,” said Bob Jennings, chief executive officer of
ClosingCorp. “Lenders and realtors need to keep educating borrowers on
the costs and fees associated with closing to alleviate surprises.”

“In addition, our survey shows that 52 percent of lenders were ‘off’ on
their initial loan estimates, so there’s significant room for
improvement. Using automated fee technology can help prevent lenders
from under- or over-estimating closing costs and mitigate the risk of
costly variance issues post-closing.”

The ClosingCorp National Closing Costs Survey was conducted via online
questionnaire January 2 – 5, 2017 and targeted 1,000 adults nationwide
who have purchased a home in the past twelve months (i.e., January 1,
2016 – January 1, 2017). The margin of error was +/- 3.1 percent.

About ClosingCorp

Headquartered in San Diego, Calif., ClosingCorp owns and operates the
premier source of intelligence for closing costs and service providers
in the U.S. residential real estate industry. Through innovative
solutions, progressive technologies and strong alliances, the company
delivers timely, accurate and transparent results that help optimize
closing processes and services for mortgage lenders, title and
settlement companies and real estate professionals. Clients rely on
ClosingCorp to help improve efficiencies and mitigate risk. For more
information, please visit www.closing.com.

Contacts

Campbell Lewis Communications
Bill Campbell, 212-995-8057
bill@campbelllewis.com
or
ClosingCorp
Carol
Crawford, 858-551-1500 ext. 220
ccrawford@closing.com