Potential homebuyers might be ill-prepared for the mortgage process, as they answered basic questions wrong nearly 33% of the time, a Zillow Mortgage Marketplace survey found. This substantial minority might not be aware
Among first-time homebuyers, 34% were not aware they could purchase a home with putting less than 5% down.
Overall, 26% believed they had to close their loan with the lender that pre-approved their application, while 24% said the best rates and fees can be obtained from the bank they currently do business with.
In addition, 34% believe the law requires every lender to charge the same fees for credit reports and appraisals.
With existing homeowners, nearly one-in-five said underwater borrowers are not able to refinance. Almost half of the current homeowners said a borrower needs to wait at least one year after doing a refi before they could refi again.
Some of the findings support what many in the mortgage industry have been saying for years. Zillow found 34% of potential buyers do not know what the term “annual percentage rate” means.
Half of the respondents were not aware that mortgage rates can change throughout the day.
