Homebuyer facts and statistics for the 2013 marketplace. What should I expect when buying or refinan

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Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
San Diego, California
LoanSafe Members,

Within this post I will be posting statistics of what most homebuyers are unaware of and need to be educated about before shopping for a new home. These statistics and surveys were provided by more than 1,000 current and prospective homeowners and buyers by Zillow.
Among the findings of the survey:

1. 31% of buyers don’t think it’s possible to get a mortgage for less than 3.5% - 5% down. FHA is a product that will allow financing with 3.5% down or equity for refinances. Conventional allows a down payment or equity position of only 5%, both of these products would require mortgage insurance however can still be a beneficial savings even if you reduce the term or pay more towards your new mortgage.
2. 34% don’t know what the term “Annual Percentage Rate (APR)” means. APR is the Total Cost of Credit, and some costs are determined as APR items, others are not. The APR is likely to differ from the “note rate” or interest rate that’s advertised by the lender, typically due to the other fee’s involved with the transaction required by the lender. </SPAN>

3. 25% of people believe that you must close with the lender that pre-approves your loan. This is not the case, you want to make sure that you do all your shopping before ordering an appraisal because many appraisals are not transferrable and you would incur an additional cost with a new lender. There’s many different ways to structure a new loan depending on your goals, needs and wants for a property. Working with a qualified loan officer that understands that and gives you the time to understand these options is a good one to work with. Quality of service coupled with great rates and costs is who you should work with, I myself strive to provide this for each and every one of my clients.

4. 34% of respondents from the survey believe that all lenders are required by law to charge the same fees to all clients for credit report, appraisals and the like. This will also vary between lenders and who they use as either the appraisers or if they have an appraisal management company. </SPAN>

5. 24% of buyers believe the best mortgage deals are available through banks where they currently have their savings and checking accounts. Many competing lenders can undercut those banks by large margins. </SPAN>

6. 20% of homeowners surveyed that they didn’t know many underwater mortgages (borrowers who owe more than their home is worth) can be refinanced into lower rate loans.

7. 33% of homeowners were unaware that if they go through a foreclosure or short sale, they may not have to wait a full seven years before it takes for their credit score to recover and buy a home again. After foreclosure or short sale you can buy through FHA after 3 years. Conventional you can buy 2 years after you have completed a short sale with 20% down or 4 years with 10% down.</SPAN>

“All too often buyers focus on negotiating a lower home price and ignore the impotence of finding the right loan, If a homebuyer can lower their interest rate by even a half a percentage point, they can not only increase their purchasing power, buy save thousands of dollars over the life of the loan,” said Erin Lantz, director of mortgages for Zillow.
Some items here are quoted by CNN Money “Homebuyers clueless about mortgages” by Les Christie
</SPAN>One-third of homebuyers clueless about mortgages - May. 9, 2013

If you have any additional questions or would like to see if you’re eligible for any programs, I’m always happy to help. </SPAN></SPAN>