Inadequate Financial Knowledge Delays Many Home Buyers, Study Says.
I’ve worked with countless mortgage lenders over the years and have come to depend on just a
handful, to provide me with timely, accurate information, with no drama.
I’ve always believed that the home buying process should not be stressful or confusing. But I’ve seen that it can be and the majority of issues arise when Realtors and Lenders are not understanding, open and forthcoming with their clients.
I’ve said it before and I’ll say it again. If you are a home buyer or a home seller, and you feel overwhelmed, you’re working with the wrong Realtor or Lender. Every loan officer that I’ve come in contact with more than once, understands that I insist on being informed, being respectful of contract terms, and being educated along the way. A home loan is about far, far more than just a low rate.
A new study recently uncovered a gap in U.S. financial education which is impacting today’s homebuyers. While the survey aimed to understand perceptions of the homebuying process, it ended up unveiling the concept that a lack of financial knowledge can be creating a risk for buyers, and holding them back from entering the housing market.
While 92 percent of consumers believe that owning a home is a better long-term financial decision than renting, only 30 percent know where to start when it comes to buying a home, according to the survey.
Only 59 percent of respondents said they have the financial education needed to purchase a home, and of those who have not yet purchased, 1 in 5 don’t feel prepared to make the financial decision.
Lack of financial understanding may be leading to risky home purchase behavior, with more consumers citing they spent considerable time buying a TV than selecting a mortgage.
Respondents were 11 percent more likely to seek advice and recommendations when planning a vacation than when buying a home, and were twice as likely to compare options when buying a TV than when selecting a mortgage.
While 63 percent said they could not navigate the financial side of the home buying process alone, the majority (51 percent) entrust the selection of their lender to their real estate agent.
For many, buying a home is a huge source of stress. Forty-four percent of respondents found the process to be scary or intimidating, citing it as more stressful than major life events like choosing a career or picking the next President. As more Millennials enter the buying market, the gap in preparedness remains apparent, with more than 30 percent saying they don’t know the mortgage amount they could afford and 25 percent saying they don’t understand the long-term financial impact of buying a home. What’s more, increased levels of student debt have also created cause for concern, with 50 percent saying those concerns have delayed other financial decisions such as buying a home.
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Bill Salvatore / Arizona Elite Properties
Residential Sales, Marketing, and Property Management
Source: www.sentemortgage.com. Reprinted with permission from RISMedia. ©2016. All rights reserved.
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