Most homeowners, especially first-timers, borrow a large amount of money
to buy a home. But how much do they know about the process? A survey
conducted by Ipsos Ipsos for Zillow attempted to find out.
According to the Zillow Mortgage Marketplace survey of first-time
homebuyers, they answered one-third (32.5 percent) of the questions
about basic mortgage information incorrectly.
For example, one-third (34 percent) of first-time homebuyers don’t
realize it’s possible to get a home loan with a downpayment less than 5
percent.
Many first-time buyers also don’t understand how to secure the best
possible interest rate and loan terms. One-quarter (26 percent)
incorrectly believe they’re obligated to close their loan with the
lender that pre-approved it; and, separately, 24 percent incorrectly
believe that the best interest rates and fees can always be found
through the bank they currently use.
Additionally, one-third of buyers (34 percent) believe all lenders are
required by law to charge the same fees for credit reports and
appraisals, even though it’s best to shop multiple lenders to compare
rates and fees.
Confusion also reigns after the home sale. Almost half (47 percent) of
current homeowners believe they must wait at least one year between
refinancing.
“All too often buyers focus on negotiating a lower home price and ignore
the importance of finding the right loan,” says Erin Lantz, director of
mortgages for Zillow. “If a homebuyer can lower their interest rate by
even half a percentage point, they can not only increase their
purchasing power, but save thousands of dollars over the life of the
loan.”
Additional survey findings
• One-third (34 percent) of polled prospective homebuyers do not know
what the term “annual percentage rate” (APR) means. The annual
percentage rate (APR) is a yearly rate that reflects the true cost of a
mortgage and is inclusive of the interest rate, points, mortgage
insurance (when applicable), and other fees, including origination and
underwriting fees. The APR will typically be higher than the interest
rate quoted by lenders, and should be used as a starting point when
comparing loan quotes between lenders.
• Half (50 percent) of prospective homebuyers do not understand that
mortgage rates change throughout the day. In reality, much like the
stock market, mortgage rates can change rapidly. To get the optimum
rate, it is important to monitor rates and shop around.
• Nearly one-third (31 percent) of current homeowners incorrectly
believe that you must wait seven years after a short sale or foreclosure
to purchase again. In most cases, homebuyers with a short sale history
typically only need to wait 2-4 years depending on their downpayment and
the loan type. The waiting period after a foreclosure is longer –
typically, buyers need to wait 3-7 years before they can qualify for a
new home loan.
• More than one-third (34 percent) of current homeowners incorrectly
believe that you can only refinance your home every 12 months. In
reality, homeowners can refinance as often as they want. However,
homeowners should weigh the cost of the refinance against the time they
will own the home and the monthly payment change to determine if
refinancing makes sense.
© 2013 Florida Realtors®
No comments:
Post a Comment