Homebuyers Don’t Adequately Research Mortgages
Again, I have been saying this for months now and finally I am not alone. This is very scary. The survey — conducted on more than 2,700 adults by market research firm Harris Interactive — found that 31% of Americans spend less than two hours researching their home loan. Two hours represents the average amount of time spent researching a vacation or computer purchase, or half the amount of time spent researching a new car, Zillow said.
I think people might get confused when they read this and think it is all about shopping for a mortgage. I heard a saying once, “you shop for shoes, you shop for clothes, but when you shop for a mortgage you end up with the biggest liar.”
In the manual I am reading for the National Mortgage Licensing System there is a paragraph that reads “Another major challenge has been rates, and the fact that people shop on them, not realizing the value of working with a competent professional. You wouldn’t go to Wal-mart’s medical center to cure your cancer, so why would you go to the low-cost lender to handle the most important financial decision of your entire life? Still, people shopped around for the “lowest rates,” most of the time not even realizing how rates are constructed and advertised.”
The reason you need to do research in my opinion is so you know what the exact costs are, what’s involved in the process, what documentation you have to provide, how much can you be pre-qualified, and most important being what monthly payment are you comfortable with. We need to educate our borrowers and let them know being pre-qualified for a payment isn’t the same as being able to afford it. You can still qualify for more than you can afford.
This isn’t done an hour before you go out and look at homes or after a full day of driving around with your real estate agent. I am not trying to offend anyone or tell someone how to do business. It’s none of my business if you want to put a borrower in your car and spend money on gas and lose a whole day. I care about the buyer who just fell in love with a home and now finds out that they cannot afford to buy it. I’m the one who has to tell them this. I find that to be unfair. We need to educate them. I feel that this in turn would create more business for you but then again what do I know.