Potential Homebuyers Have Not Used All Available Resources or
Determined Key Costs
More than three-fourths of buyers, 83 percent, have been pre-qualified
for a home loan.
Sixty percent of respondents began their home search after at least
one of the following took place, including:
Having achieved sufficient financial stability, 22 percent
The market becoming more affordable, 20 percent
Improved credit scores to qualify for better mortgages, 20 percent
Mortgage rates and lending options becoming more affordable, 18
Having saved enough for a down payment, 17 percent
RIVERWOODS, Ill.--(BUSINESS WIRE)--
Homebuying season is in full-swing and a recent independent poll
commissioned by Discover Home Loans shows that 94 percent of prospective
buyers believe they are making a good investment by purchasing a home.
Although 87 percent are confident they will find an affordable home
loan, the poll shows many have not done the math to determine their
costs. In fact, 63 percent find themselves overwhelmed by the amount of
mortgage information available.
A large majority of buyers surveyed are confident in their ability to
secure an affordable loan and obtain the type of property they want.
Unsure of the Cost
Despite feeling financially prepared when entering the process, many
homebuyers don’t know what purchasing a home will actually cost them.
Although 87 percent know what type of property they can afford, only
52 percent have actually determined what their projected monthly
payment may be.
Forty-one percent have yet to calculate their down payment.
Nearly half, 48 percent, don’t know how much their mortgage payment
would be if they chose a more or less expensive property.
Inundated with Information
In general, the majority of those looking to purchase a home find
information about the financing process overwhelming.
Nearly two-thirds feel overwhelmed by the amount of information
available on home financing.
This is especially true for those under age 30, of which 76
percent reported feeling overwhelmed.
Seventy-six percent of first-time buyers reported feeling
overwhelmed, versus 54 percent of those who have previously owned.
“The industry is becoming more transparent in an effort to help
homebuyers become informed about changes that may affect their process,”
said Cameron Findlay, chief economist at Discover Home Loans. “The sheer
amount of information can lead to confusion and stress. Those looking to
purchase should work closely with their lender and realtor to make sure
they are comfortable with mortgage terms and understand the impact a
loan will have on their finances.”
Prospective homebuyers turn to a variety of different resources to help
them make key decisions and understand the process. For example, for
help determining whether buying a particular home would be a good
investment, prospective buyers turn to real estate agents most often, 66
percent, then to family and friends, 56 percent. However, when
evaluating mortgage terms and comparing offers, they turn to mortgage
bankers most often, 59 percent, then to real estate agents, 49 percent.
The national survey of 1,037 prospective homebuyers was commissioned by Discover
Home Loans and conducted by Versta Research, an independent survey
research firm (http://www.verstaresearch.com),
March 24 to April 4, 2014. Assuming no sample bias, the maximum margin
of sampling error was +/-3 percentage points with a 95 percent level of
Discover Financial Services (NYSE: DFS) is a direct banking and payment
services company with one of the most recognized brands in U.S.
financial services. Since its inception in 1986, the company has become
one of the largest card issuers in the United States. The company issues
the Discover card, America's cash rewards pioneer, and offers home
loans, private student loans, personal loans, home equity loans,
checking and savings accounts, certificates of deposit and money market
accounts through its direct banking business. It operates the Discover
Network, with millions of merchant and cash access locations; PULSE, one
of the nation's leading ATM/debit networks; and Diners Club
International, a global payments network with acceptance in more than
185 countries and territories. For more information, visit www.discover.com/company.
Photos/Multimedia Gallery Available: http://www.businesswire.com/multimedia/home/20140721005231/en/
Susan J. Diaz de Leon
Source: Discover Financial Services