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A new report from Zillow reveals that not only are mortgages difficult for most homebuyers to understand, but that the vast majority rely on agents to help them understand their financing options. became.
The report, released Monday, specifically shows that 55 percent of all successful buyers want their agents and brokers to educate them about home financing. First-time buyers are even more numerous, with 58% of respondents asking agents for information. Her 53% of repeat buyers rely on agents.
By comparison, only about one-third of all buyers use a bank or other financial institution for mortgage education, and less than one-third rely on websites. Only 29% rely on a friend to help them understand their mortgage options.
This means that agents are by far the most popular way for real estate consumers to learn about their financing options.
The findings will be good news for many big real estate brands. Large companies such as Compass and Redfin are making large investments in the mortgage business. The fact that consumers rely on agents means that in theory agents and their intermediaries should be able to capture more money by attracting people to their own lending ecosystem. .
In any case, Zillow’s new report also shows that mortgages tend to be a source of stress for consumers. For example, a majority (56%) said they understand the costs associated with a mortgage as one of the three most difficult financial issues to understand when buying a home. By comparison, only 45% of consumers understood how much they were willing to pay for the top three most difficult issues to understand.
The report is based on a December survey of 665 successful and 1,908 prospective buyers. Successful buyers were those who had purchased a home in the last two years, and prospective buyers were those who were planning to buy a home in the next year.
The report focuses specifically on the economics of buying a home, leaving out recent trends such as the COVID-19 pandemic, housing preferences, and a host of other issues.
But even so, the implication is that the complex mortgage process is still a source of great stress for many consumers. Together, the findings suggest opportunities for agencies and businesses to provide information and make the lending process more user-friendly.
Other findings in the report reveal that just over a quarter of homebuyers, or 28 percent, feel stressed about saving for a down payment. Seventy-one percent of buyers reported making at least one sacrifice, such as cutting back on entertainment or vacations, to save money for a home. Also, 73% of his buyers said they paid for some form of mortgage insurance.
The report also found that about a third of buyers reported receiving some kind of down payment or subsidy when buying a home. Banks were the most common beneficiaries mentioned in the report. Other sources include credit unions, non-profit organizations, and governments.
Email Jim Dalrymple II