Dec
15

Would You Buy a Mortgage from a Major Retailer?

December 15, 2012

chicago new home mortgages

Will mortgages soon be sold at Target and Wal-Mart? According to a study by the Carlisle & Gallagher Consulting Group, one in three U.S. consumers said they would consider purchasing a mortgage from a major retailer. Almost half of the survey respondents said they would consider purchasing a mortgage from PayPal, an online payment provider.

Two-thirds of consumers said the high cost of obtaining a loan was the most frustrating part of the mortgage application process. Poor communication with lenders and slow execution also proved to be problematic for many homeowners, which is why many indicated they would consider shopping for mortgages at places other than traditional banks.

After the housing bubble burst in 2008, many banks tightened their mortgage restrictions, making it more difficult for homeowners to obtain a loan. As the housing market slowly recovers, mortgage rates remain low and banks are beginning to ease up on some of their restrictions.

Currently, there are a few major retailers who sell mortgages.  In 2011, Costco began offering home loans online. While the company has chosen not to disclose its loan volume, the financial services director of Costco claims the service is faring quite well. Wal-Mart stated they had no plans to offer mortgages any time in the near future and PayPal offers credit lines, but does not have any plans to sell mortgages.

Yet as the housing market recovers, it will be interesting to see if major retailers decide to sell mortgages after all.

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Jessica Thom

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