A report from Zillow has revealed that most homebuyers struggle to understand mortgages, but 55% also turn to agents to help understand their financing options.
Another Zillow survey found 86% of sellers prefer a buyer who has been pre-approved (fully approved) instead of pre-qualifiedfor a loan.
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Pre-approval includes the full financial history (including income, assets, debts, and credit score) that is requested during pre-qualification and also requires documentation to support the info provided and a credit check.
Zillow: Why Most Buyers Rely on Agents for Loan Info
The report is based on a December 2022 survey of 665 successful buyers and 1,908 prospective buyers.
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The May 22nd report specifically shows that 55% of all successful buyers (COE) turn to their agents or brokers for information regarding home financing.
First-time buyers turn to agents in even greater numbers, with 58% saying they go to agents for information. Among repeat buyers, it’s 53%.
By comparison, only about a third of all buyers turn to financial institutions such as banks for mortgage education, and fewer than a third rely on websites. Just 29 % rely on friends to help them understand their mortgage options.
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That means agents are the most popular way for real estate consumers to learn about their financing choices.
Zillow’s new report also shows that mortgages tend to be a point of stress for consumers.
For example, a majority, or 56%, ranked understanding the costs associated with their mortgage as among the three most difficult financial issues to understand during their homebuying journey.
Here are the top three reasons, according to the survey:
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30% were worried that shopping would hurt their credit score
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24% were happy with the lender they contacted first
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19% didn’t want to spend time shopping for mortgages
Only 13% of respondents said that they spent a month researching mortgage lenders before they applied, the survey said.
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