According to a survey by Zillow, homebuyers are confused when it comes to some of the most basic aspects of mortgages. Those interested in buying real estate in Boston and real estate in other parts of the U.S. answered Zillow’s basic mortgage survey questions wrong 46% of the time! At the same time, 57% of those interested in buying a home who responded to the survey don’t understand how ARMs (adjustable rate mortgages) work. 34% of those surveyed don’t understand that lender fees can be negotiated and vary from lender to lender. Many believe that lenders all charge the same amount as required by law. Untrue! Zillow Mortgage Marketplace Director Erin Lantz said, “Most people wouldn’t jump out of a plane if they didn’t know how to use a parachute, yet each year many buyers commit to the largest loan they will take out in their lifetimes without understanding essential information about mortgages. By simply spending a few hours researching how a mortgage works, and by shopping around for the most competitive rates and fees, buyers can save a lot of money.” In addition to the shocking information above, Zillow’s survey also uncovered the following statistics (all of which were prospective homebuyers):
45% think they should always buy mortgage discount points
55% don’t understand that mortgage rates change as often as throughout the day
37% think that pre-qualification for a mortgage means the financing has been secured
42% don’t understand that FHA loans are available to everyone not just first-time buyers.
Still unsure of your mortgage knowledge? Contact High Rise Boston to discuss any questions you have regarding purchasing real estate or acquiring financing.