Personal Loans

Seattle, WA, United States (AHN) – A recent survey on home buyers has revealed that most don’t know the basics about mortgages.

Researchers in a new Zillow Mortgage Marketplace report outline how 46 percent of survey respondents answered questions about mortgage information wrong.

As the housing market continues its struggle to rebound from the economic crisis that was fuelled by risky home loans, 44 percent of home buyers admitted they still are not confident in their knowledge of mortgages or the mortgage process.

An example of this is trend is when questioned about the specifics of adjustable rate mortgages more than half (57 percent) of prospective home buyers didn’t understand how they worked.

“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,” said Zillow Mortgage Marketplace Director Erin Lantz. “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.”

Additional survey findings:

• Nearly half (45 percent) of polled prospective home buyers believe that they should always buy mortgage discount points when obtaining a mortgage.
• More than half (55 percent) of prospective home buyers in the study do not understand that mortgage rates vary throughout the day.
• More than one-third (37 percent) of prospective home buyers who were polled believe that pre-qualifying for a loan means they have secured financing.
• More than two in five (42 percent) of the polled prospective home buyers do not understand that Federal Housing Administration (FHA) loans are available to all buyers.

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