In a recent survey by Zillow.com, an alarming number of participants indicated that they do not fully understand how mortgages work, despite being one of the largest purchases they will make in their lifetimes. The survey included the results from 1,005 perspective home buyers and has a margin of error of +/-3.1 percentage points.
Here are some of the survey results:
• 44% say they are not confident in their knowledge of the mortgage process.
• 45% believe that borrowers should always buy discount points. This is not always true as some will not stay in their homes long enough to break even.
• 55% do not understand that mortgage rates fluctuate throughout the day, like stocks.
• 57% do not understand how Adjustable Rate Mortgages (ARMs) work, most believing that the rate always adjusts upward at the end of the initial term.
• 42% did not realize that FHA loans are available to more than just first-time home buyers. Repeat buyers can also qualify for FHA loans.
• 37% believe that being pre-qualified means that they have secured financing. Until a loan application has been approved without further conditions, the financing is not secured.
Our advice: When you are ready to obtain your next mortgage loan, be sure to speak with a licensed, qualified mortgage loan officer. If you have questions, ask them. Generally speaking, mortgage companies do not spend a lot of time covering the basic information with all borrowers because many are very familiar with the process. But if you ever have a question during the loan process, it is in your best interest to find the answers. At Mission Mortgage, our loan officers average over 15 years in the business and we’ll be happy to answer any and all questions that you have.
Buying a home is a tremendous financial decision and not one that should be taken lightly. We understand that the mortgage process can be difficult to navigate, and we’re here to help. If you have questions about the mortgage process, but aren’t ready to speak with a loan officer, you may email your questions to us at firstname.lastname@example.org. We’ll be happy to help you in any way that we can.
To see the complete press release from Zillow.com, please click here.