As demand grows ever higher for mortgages, it appears homebuyers are still not doing their homework, reports one real estate website. And that could offer mortgage professionals the perfect opportunity to boost their business.
When it comes to mortgages, homebuyers answered basic questions about terms, how to choose a lender and financing wrong nearly one-third of the time, according to a recent survey of more than 1,000 current and prospective homeowners by Zillow Mortgage Marketplace.
The findings don’t surprise Scott Schang, branch manager of Broadview Mortgage. Although consumers are more educated today than they’ve ever been, there are also constant changes in the industry, he said.
“There are even a lot of lenders that have trouble keeping up with what the guidelines are,” Schang said.
Among the survey's findings, 31% of buyers don't think it's possible to get a mortgage for less than 5% down; 34% don't know what the term "annual percentage rate" (APR) means and one in four believe you must close with the lender that pre-approves your mortgage.
"Most people wouldn't jump out of a plane if they didn't know how to use a parachute, yet each year many buyers commit to the largest loan they will take out in their lifetimes without understanding essential information about mortgages," said Zillow Mortgage Marketplace Director, Erin Lantz, in a press release. "By simply spending a few hours researching how a mortgage works, and by shopping around for the most competitive rates and fees, buyers can save a lot of money."
More importantly, Schang says this lack of knowledge creates an opportunity for mortgage professionals to educate consumers.
“As a lender, don’t assume that people already know what you do.”
Schang recommends mortgage professionals peruse their email sent folder to compile questions and needs from their customers.
“You answer the same questions from every borrower,” he said. “Just copy those email responses that you sent back and you’ll have three years’ worth of blogs posts to publish. Lenders have an obligation to educate consumers.”
Though it might require a little extra effort, Schang said this method of trust building will pay off for those who do it well.
By the time the customer has found your site and had their questions answered, they will already feel comfortable contacting you for business, Schang said.