Consumers Think They Know About Mortgages, But Most Have No Idea

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Affordability and competition in the current housing market are the most worrying factors for otherwise confident consumers, but a recent survey indicates nearly third-quarters of prospective homebuyers really don’t understand the mortgage process

In a recent survey conducted by JPMorgan Chase, 42% of self-identified prospective homebuyers said they weren’t concerned about lacking understanding of what it takes to obtain a mortgage. But later in the survey, only 25% of respondents correctly answered a series of questions about how annual percentage rates work, down payments and lenders.

While 70% of respondents worry that rising home prices mean they may have already missed the boat for buying at the best time, 62% said now is a better time to purchase a home compared to last year. Potential homebuyers are getting off the sidelines thanks to rising rental costs and low interest rates, the study says.

“Buyers are clearly concerned about housing inventory and rising prices, especially during the competitive spring buying season,” Cecelia Barbieri, a senior vice president at Chase Mortgage, said in a press release. “But the research shows that interested buyers are optimistic and ready to act on their goals.”

The survey also revealed that 32% of interested buyers want to take advantage of low rates, with 35% indicated that interest rates on 30-year fixed-rate loans rising above 4% would delay their decision to buy.

Three in 10 potential homebuyers indicated they’re ready to purchase a home sometime in the next 18 months, with 20% attributing that sentiment to the rising cost of rent and a desire to upgrade from their current homes.

Article source: http://www.nationalmortgagenews.com/news/origination/consumers-think-they-know-about-mortgages-but-most-have-no-idea-1049980-1.html

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