What Is Your Mortgage IQ? It Might Be Lower Than You Think
After several years of depressed buyer demand, home buyers are back! Buyers entering the market now are faced with bidding wars and are taking measures such as removing contingencies and offering to close in less than 30 days in order to make their offers look better. But with the quick-to-pull-the-trigger mentality, are future home buyers ready to get a mortgage? A Zillow survey just released indicates that many buyers are not.
The Mortgage IQ Survey showed that prospective home buyers answered very basic mortgage questions wrong nearly one-third of the time.
For example, one-third (34 percent) of first-time home buyers are not aware that it is possible to get a home loan with a down payment of less than 5 percent. In fact, the number of lenders on Zillow Mortgage Marketplace quoting loan requests with a down payment between 3.5 and 5 percent has risen by 570 percent over the past two years.
Home buyers also do not understand how to secure the best possible interest rate and loan terms. One-quarter (26 percent) of home buyers incorrectly believe they are obligated to close their loan with the lender that pre-approved them, and, separately, 24 percent of home buyers incorrectly believe that the best interest rates and fees can always be found through the bank they currently do business with. Additionally, one-third of buyers (34 percent) believe all lenders are required by law to charge the same fees for credit reports and appraisals. In fact, home buyers should always shop multiple lenders to compare rates and fees in order to find the best loan for their situation.
Think you have a high mortgage IQ? Take the 10-question Mortgage IQ Quiz yourself to see how prepared you are to enter the market and secure your dream home while getting the best mortgage for you.