A recent poll of more than 1,000 prospective homebuyers found that the majority of buyers are unaware of the true costs of homeownership.
The poll, conducted by Discover Home Loans, found that 87 percent of the buyers surveyed say they know what type of property they can afford, but only 52 percent have actually determined what their projected monthly mortgage payment would be.
The survey found prospective homebuyers are turning to Realtors® for more sources of information and to get a better understanding of the financial aspects of homeownership. Sixty-six percent of those surveyed said they consulted a real estate professional for help to evaluate whether purchasing a home will be a good investment.
Cameron Findlay, chief economist at Discover Home Loans, explained that the industry is trying to make the mortgage process easier for homebuyers so as to help them get acquainted with the process.
“The sheer amount of information can lead to confusion and stress,” said Findlay, in a statement. “Those looking to purchase should work closely with their lender and Realtor® to make sure they are comfortable with mortgage terms and understand the impact a loan will have on their finances.”
Additional findings include:
- 41 percent say they haven’t yet calculated their down payment
- 48 percent say they don’t know how much their mortgage payment would be if they chose a more or less expensive property
- 76 percent of first-time buyers said they felt overwhelmed by the amount of information available on home financing compared to 54 percent who previously owned a home
- 56 percent of the homebuyers surveyed said they consulted family or friends and 39 percent sought out the help of a mortgage banker.
According to the National Association of Realtors®’ (NAR) latest existing home sales report, first-time buyers underperformed, accounting for 27 percent of total home sales. While experts blame unsteady economic growth, an unfriendly mortgage application could also be a factor, as observed in the results of the survey.
The national survey of 1,037 prospective homebuyers was commissioned by Discover Home Loans and conducted by Versta Research, March 24 to April 4, 2014.