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As a Consumer, do YOU Understand Your Mortgage?

As a Consumer, do YOUUnderstand Your Mortgage?
Zillow Mortgage Marketplace recently conducted a survey with results indicating home buyers may not fully understand the basic ideas behind real estate mortgages. Zillow Mortgage Marketplace Director, Erin Lantz, noted that, "Most people wouldn't jump out of a plane if they didn't know how to use a parachute, yet each year many buyers commit to the largest loan they will take out in their lifetimes without understanding essential information about mortgages. By simply spending a few hours researching how a mortgage works, and by shopping around for the most competitive rates and fees, buyers can save a lot of money."
·         44% of prospective buyers are not confident of their knowledge of mortgages or the process as a whole.
·         57% do not know how ARMs (adjustable rate mortgages) work.
An ARM is a mortgage loan with the interest rate adjusted periodically based on an index reflecting the cost to the lender of borrowing on the credit markets. ARM interest rates adjust according to prevailing rates. Borrowers may experience lower or higher rates when the ARM is reset. 
·         34% do not understand that lender fees are negotiable and vary by lender.
Lenders are not required by law to charge a constant ... more

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