A recent Zillow survey shows that prospective home owners still have a bit to learn about mortgages. Here are some of the findings, along with facts to help you become a more educated buyer:
Survey Finding: One-third of home buyers think they need a down payment of at least 5% to make a home purchase.
FACT: Loan programs insured by the Federal Housing Administration (FHA) require as little as 3.5% down. FHA loans also offer more flexible underwriting guidelines than conventional financing, and can be used for single- and multi-family homes (up to four units).
Survey Finding: 24% of home buyers believe the best mortgage deals are available through the banks where they have savings and checking accounts.
FACT: Other lenders can compete with and often offer lower rates than institutional banks, along with a wide range of loan programs to choose from.
Survey Finding: 20% of homeowners think that underwater mortgages — those in which borrowers owe more than their homes are worth – can’t be refinanced into lower rates.
FACT: Programs like HARP (the Home Affordable Refinance Program) and Freddie Mac’s Relief Refinance Mortgages (a.k.a. Open Access) can help eligible home owners refinance despite declining property values.
Survey Finding: One-third of homeowners believe that after a foreclosure or short sale, it takes a full seven years before credit scores recover and they can buy another home.
FACT: Some homeowners who foreclose their home or sell it on a short sale can obtain financing for a new one in as little as two years.
With all the information (and misconceptions) surrounding mortgages, learning what you need to make smart, informed decisions can feel pretty overwhelming. While we encourage our clients to learn as much as they can about the home financing process, we also know few people have the time to do all the research on their own.
That’s where the value of an experienced loan officer comes in. By carefully working to learn your life plans and financial circumstances, an experienced, reputable loan officer will give you trusted feedback and guidance, so you can find a loan that fully meets your needs and circumstances.