Consumers often lack knowledge about the mortgage market and hold some incorrect views about how it works according to a new poll.
With many would-be first-time buyers struggling to save a downpayment, one in five believe that they need a minimum of 5% while almost half of respondents ranked themselves 5 or lower on a 10-point scale of mortgage knowledge.
The survey was conducted by FREEandCLEAR and also reveals that 6% of respondents think Fannie Mae was the first female senator, 86% were not taught anything about mortgages at high school and 83% did not learn about home loans in college.
For information, lenders are the top source followed by real estate agents. The internet is used by a quarter of consumers to research the best loan but almost two-thirds only compared one or two lenders before applying for a mortgage.
Their existing bank (30%) or real estate agent referral (29%) were the top ways to find a mortgage lender with just 9% using the internet.
Half of consumers contacted a big bank when arranging their mortgage with local banks and mortgage brokers next at 38% each.
An overwhelming 90% of respondents said they were happy with the deal they got from their mortgage lender while 56% said the paperwork was the most challenging part of the process.
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