If credit unions are having trouble growing their mortgage services, that might be because most consumers really don't understand the mortgage contracts they need to use when buying a house.
Even after the housing finance industry has largely retreated from so-called exotic or complicated mortgage products, most home buyers still don't understand the plainer and simpler contracts that have come to dominate the real estate market.
Sponsored by Zillow Mortgage Marketplace, an online mortgage resource, the survey found, for example, that 57% of home buyers responding to the survey confessed that they did not know how adjustable rate mortgages work.
Recommended For You
More than 33% didn't understand that lender fees are negotiable and can vary among lenders.
This lack of knowledge, in particular, would appear to hurt credit union's attempts to make the case they are often the least expensive mortgage option in many markets.
"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 Erin Lantz, Zillow Mortgage Marketplace director.
"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," Lantz said.
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more inforrmation visit Asset & Logo Licensing.
