One-Third of Homebuyers Lack Basic Mortgage Knowledge

Julie C. Nichols General

The M Report – Tory Barringer

According to Zillow, homebuyers participating in its Mortgage Marketplace Survey answered basic questions on mortgage information incorrectly nearly one-third (32.5%) of the time. For example, 34% of first-time homebuyers are not aware that they might be able to get a home loan with a down payment of less than 5 percent. According to Zillow, the number of lenders on the company’s Mortgage Marketplace that quote loan requests with a down payment between 3.5 and 5 percent has risen by 570% over the past two years. In addition, homebuyers seem not to understand how to secure the best possible interest rate and loan terms. Twenty-six percent of homebuyer respondents believe—incorrectly—they are obligated to close their loan with the lender the pre-approved them. Separately, 24% believe the best interest rates and fees can always be found through the bank with which they currently do business.

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