Consumers who spend some time shopping around for home loans are more satisfied with the mortgage origination experience than those who don't bother to shop around.

But most consumers aren't satisfied enough to recommend their lender to others.

Market researcher and consumer satisfaction rater J.D. Power and Associates says consumers who shopped solely with mortgage brokers were more satisfied with the mortgage acquisition process than those who shopped solely with a direct lender.

"Brokers are perhaps more dependent on customer referrals than the direct lenders. As a result, brokers may be more in tune with the cause and effect of customer satisfaction and advocacy," said Jeremy Bowler, director of the finance and insurance practice at the Westlake Village, CA-based firm.

However, consumers were most satisfied with the mortgage acquisition process when they contacted a broker, but also went on to apply for their loan directly with a lender, according to Power's 2005 Home Mortgage Study.

"Those direct-to-lender customers who comparison shopped with at least one broker rate both the lender personnel and the loan application and approval process higher than do customers who never contacted a broker in their shopping process," said Jeremy Bowler, director of the finance and insurance practice.

Shopping around gives consumers both more insight into the lending process and time to compare rates and terms. It's not surprising that understanding the process and saving money tend to lead to satisfaction.

Power's study is based on responses from more than 11,000 home mortgage customers and found that only 5 percent of them bothered to shop around at both brokers and lenders. Twenty-nine percent shopped brokers, but the majority shopped only lenders.

The study's Customer Satisfaction Index was based on four variables in the mortgage lending process.

1. Day-to-day administration of the account comprised 32 percent of overall mortgage service satisfaction.

2. Billing and payment experiences accounted for 30 percent of overall satisfaction.

3. The loan origination process was 21 percent of satisfaction.

4. The customer-initiated contact experience accounted for 16 percent of consumer satisfaction in the mortgage origination process.

Unfortunately, overall, the survey found consumers are not particularly gushing with satisfaction.

Even among those who rated their lender nine overall on a 10-point scale, only two in five would definitely recommend their lender to others.

Here's how to get more satisfaction from the mortgage acquisition process.

• Thoroughly immerse yourself in learning about the mortgage origination process, including what type of mortgage best fits your lifestyle. If, for example, you know you'll move up or away in the next few years an adjustable-rate mortgage that's cheaper than a fixed-rate mortgage is probably a better deal.

• Get referrals to lenders, brokers (and other related professionals you'll encounter in the process, including title and escrow companies) from family members, friends, coworkers and others you trust and who also recently enjoyed a satisfactory mortgage acquisition. Shop around for the best rates and terms, but also shop for professionals you can trust.

• Hire only mortgage brokers and lenders who will fully disclose, in a timely manner, before the close of escrow date, yield spread premiums, origination fees and any other costs that will affect your bottom line. Also consider working with a mortgage counselor, mortgage planner, social agency or other entity that does not profit from the mortgage origination process.

• Get a loan rate lock -- in writing -- to guarantee your interest rate, points and other fees and terms for a specific period.

• Scrutinize the good faith estimate and any broker or lender disclosures. Question fees you don't understand. Any cost in the home buying process is negotiable. To avoid surprises, let the lender and settlement agent know that you will want to see the settlement statement at least one day before closing and that you will not be rushed on closing day.

• Set aside the day before closing to compare the good-faith estimate with the settlement statement. Contact the broker or lender, as well as the title or escrow company to demand that they explain any differences. Ask the broker, lender, title or escrow company to waive any fees that were not listed in the good-faith estimate or that cannot be verified to your liking.

• Hard-nosed consumer advocates suggest demanding a receipt for each and every charge on the settlement statement. Ask for a waiver of any fee not accompanied by a receipt. Others question the tactic and argue the settlement sheet is the receipt. In any event, if you ask for receipts, be prepared for resistance and be prepared to delay closing to get them.

• On closing day, show up prepared with plenty of time, pencil, paper, a calculator, and an inquisitive, demanding mind. Bring your mortgage counselor or other agent you may have hired to assist you.

• Do not hesitate to question any amount that you do not understand and sign nothing until you understand each charge. It's tough if you've been waiting for a month or more to close and suddenly encounter unexplainable fees, but you may have to walk away from the table. Don't bow to pressure.

Published: November 17, 2004

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A journalist for 35-years, Broderick Perkins parlayed an old-school daily newspaper career into a digital news service offering editorial content and consulting services. Perkins' San Jose, CA-based DeadlineNews Group includes the flagship news site, DeadlineNews.Com, offering real estate, personal finance and consumer journalism, and a backshop, the Deadline Newsroom.