Majority of Buyers Unaware of True Costs of Home Ownership
While the majority of home buyers recently surveyed say they feel financially prepared for home ownership, many admit they aren’t sure what purchasing a home will actually cost them, according to a poll of more than 1,000 prospective home buyers conducted by Discover Home Loans.
At What Cost Ownership
Eighty-seven percent of the buyers surveyed say they know what type of property they can afford, but only 52 percent have actually determined what their projected monthly mortgage payment would be, the survey found. Forty-one percent say they haven’t yet calculated their down payment, and nearly half — 48 percent — say they don’t know how much their mortgage payment would be if they chose a more or less expensive property, according to the survey.
The majority of home buyers say they find the financing process overwhelming, which was most evident for those under the age of 30, where 76 percent reported feeling overwhelmed by the amount of information available on home financing. Seventy-six percent of first-time buyers said they felt overwhelmed compared to 54 percent who previously owned a home.
“The sheer amount of information can lead to confusion and stress,” says Cameron Findlay, chief economist at Discover Home Loans.
However, the survey found that many home buyers are turning to real estate professionals even more so than other sources of information, such as family, friends, and even mortgage bankers, to get a better understanding of the financial aspects to home ownership. For example, of the home buyers surveyed, 66 percent said they consulted a real estate agent for help and information to assess whether purchasing a home will be a good investment, compared to 56 percent who said they consulted family or friends and 39 percent who went to a mortgage banker.