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Ready to be fleeced? Many still clueless about mortgages
How can this be? Years after the subprime mortgage meltdown almost derailed the world economy, many Americans appear to be as clueless now about mortgages as they were in the bubble years.
Back then, untold hundreds of thousands fell victim to all sorts of lending scams. And when it comes to woeful ignorance about basic mortgage facts, little appears to have changed, a new Zillow.com survey shows.
Some lowlights include:
- Wake up and smell the coffee. Not to be rude, but pre-qualifying for a mortgage does not guarantee you a loan. If that sounds like common knowledge, it isn't. Yet 37 percent of prospective homebuyers quizzed by Zillow didn't grasp this basic point.
- Yes, different lenders charge different fees - and they are negotiable. Buyers can shop around for the best deal on fees, including the cost of appraisals and credit reports.
- Another 45 percent believe they should always buy mortgage discount points. Of course, whether that makes sense depends on the length of the loan.
- No, ARMs don't always adjust to a higher rate - news to 57 percent of those surveyed by Zillow. They adjust to the prevailing rate, which could be lower than the rate when the loan was first inked.
About boston real estate now
Scott Van Voorhis is a freelance writer who specializes in real estate
and business issues.
Rona Fischman is a buyer's agent who provides a look at the local housing scene, from basements to attics.
