What’s a mortgage? 7 in 10 homeowners don’t understand the details of buying a house

NEW YORK — It turns out the saying “home sweet home” isn’t so sweet for homeowners. Seven in 10 Americans admit that owning a home is one of the most difficult parts of being an adult.

A survey of 2,000 homeowners found that 71 percent don’t fully understand the fine print of purchasing a home — but it’s not just the little things they’re unsure about. What puzzles 64 percent of homeowners is financial jargon, such as terms like “home equity,” “capital appreciation,” and “mortgage.”

More people turned to others for advice when making financial decisions about homeownership than the number who tried to figure it out themselves (55% vs. 44%). Half of Americans contact their friends who also own homes (52%), and 45 percent ask their parents for homeownership guidance.

Three in four wish there was an all-in-one resource that had the answers to all of their financial questions about owning a home (76%).

Conducted by OnePoll and commissioned by Figure, the study also revealed that owning a home was a financial wake-up call for the 63 percent of people who never thought the process would be as costly as it was.

It’s a great time to buy a home

The Cost of a HomeMore than six in 10 respondents shared they’ve put off necessary repairs since purchasing their home because they don’t have the funds to take care of them (64%). When the time comes for renovations, 57 percent will pay for the project through their savings.

With all of this in mind, seven in 10 homeowners say they would have reconsidered purchasing a home if they knew about all the unexpected costs that come with it. To help financially support their homes, 61 percent are considering a cash-out refinance or home equity line of credit (HELOC) to make home improvements or consolidate debt. However, 68 percent are unsure how.

People are determined to be in the know about their homes, though, as 43 percent of longtime homeowners have secured a lower interest rate for their homes in 2020 and 2021. Additionally, 71 percent agree that there was never a better time to purchase a home than over the last couple of years.

Nearly one in 13 homeowners purchased their home during the pandemic, with 68 percent of those respondents securing a low-interest rate and 53 percent locking in a high home appreciation rate. Most of those who purchased homes with low-interest rates during that time add they wouldn’t have been able to afford them if that wasn’t the case.

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About the Author

Chris Melore

Chris Melore has been a writer, researcher, editor, and producer in the New York-area since 2006. He won a local Emmy award for his work in sports television in 2011.

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