The mortgage process is integral to housing, but a new survey from Zillow finds many consumers are quite lost regarding the details of the process.
U.S. consumers may not be quite as smart regarding the residential mortgage process as many agents would like, according to a new survey from Zillow.
According to the website’s latest Mortgage IQ survey, consumers are incorrect about major aspects of the lending process a third of the time, though that may not be an entirely bad thing as far as agents are concerned.
What’s YOUR Mortgage IQ?
Some of the more notable results from Zillow’s survey included:
- Thirty-four percent of first-time homebuyers are unaware of the fact that there are home loans available that require down payments of 5 percent or less. Whether that means those homebuyers have never heard of the FHA or not, we’re not sure, but Zillow’s own Mortgage Marketplace reported that in the last two years, there has been a stunning 570 percent increase in loan requests with down payments between 3.5 and 5 percent, and the Obama administration’s Housing Scorecard continues to report a disproportionate market share for FHA mortgages.
- Consumers are also unaware of the fact that they can shop for mortgages: 26 percent of those surveyed said they thought they were obligated to close their loan with the lender that pre-approved them, and 24 percent thought the best available rates and fees would always be through the bank they do business with.
- Finally, 34 percent of respondents thought that all lenders are required, by law, to charge the same fees for their credit reports and appraisals.
Is There an Agent in the House?
On first blush, those results may seem horribly demoralizing, considering that so many consumers are so off on some of the mortgage processes’ most important qualities; however, there is one encouraging nugget that emerges from such information: it reinforces the need that so many have for an experienced real estate professional!
Therefore, you’ll want to make sure that you are abreast of the latest developments in the mortgage markets, so that you can provide reliable information about the lending process to your clients. Along with reading high-quality news sites, such as the excellent Calculated Risk and, of course, Chicago Agent magazine, you’ll also want to maintain close relations with a preferred lender. As we constantly highlight in our Ask a Lender series, a preferred lender can be invaluable in educating clients on current mortgage trends, and having such connections will undoubtedly reflect well on you as an agent.