One of the challenges buyers are having with financing may be a lack of really understanding the mortgage end of things.
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 of the buyers polled didn't realize how the mortgage rate was determined for a borrower. They thought that annual income was the most important factor. In reality, other considerations hve a huge impact, such as 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.
All of the above points are untrue. False.
Buyers' misunderstanding of actual mortgage practices may give some insight into why more of them are not 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 call to me, Virginia Gardner, (434) 981-0871. I will coordinate all of the different parts of your transaction including mortgage, title, insurance and inspections. You won't be alone; you will have me by your side.
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