One of the challenges Home Buyers are having with financing may be their own understanding or lack thereof about Mortgages.
In a recent survey done by research firm "Ipsos" for Zillow, a surprising number of incorrect answers to true or false questions were given by prospective buyers.
Over 3/4 didn't realize how the mortgage rate was determined for a borrower thinking that annual income was the most important factor. In addition to annual income, other considerations lenders evaluate are Credit Scores, Debt-to-Income and Loan-to-Value ratios.
A variety of myths seem to have influenced some of the common answers such as ... Interest Rates are set and released once a day; FHA Loans are for first-time buyers only; Prequalification commits the lender; Lender fees are not negotiable and Adjustable rate mortgages always go up.
Buyers' misunderstanding of actual mortgage practices may give some insight into why more buyers aren't taking advantage of the greatly reduced prices and incredibly low mortgage rates.
While getting solid information about mortgages and being pre-approved from a lender are very important, it is only one step in the home buying process. Success in buying a home in today's unique market should begin with a real estate professional that will coordinate all of the different parts of the transaction including mortgage, title, insurance and inspections. If you are interested in Buying a Home or know someone who is, I'd love to work with you!
