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Homebuyers Uncertain of How to Secure a Mortgage

New report found 70% of Americans feel renting could impact their current and long-term finances

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  • Written by  Banking Exchange staff
 
 
Homebuyers Uncertain of How to Secure a Mortgage

Prospective homebuyers are unsure of how to secure a mortgage, according to a Bank of America survey.

The Homebuyers Insight report revealed 41% of prospective homebuyers were not confident in their understanding of how to finance or secure a mortgage.

A further 41% do not confidently understand interest rates and 39% are not confident they understand home-buying terminology, suggesting banks need to do more to demystify the process.

Additionally, two-thirds (66%) of current homeowners said they would have done something differently when buying their first home.

More than half (57%) of respondents said they are unsure whether now is a good time to buy, which is an increase from 48% this time last year. This trend is even more prevalent among first-time homebuyers, as 62% reported they are unsure what to do.

According to the report, uncertainty created by higher interest rates and home prices has been exacerbated by prospective homeowners’ lack of confidence about beginning their home-buying journey.

The report also found that 72% of prospective homebuyers worry that rent increases could negatively impact their current and long-term finances.

Meanwhile, 70% of respondents reported that they feel they are not making an effective long-term investment in their future if they rent a home instead of owning one.

In addition to the financial considerations of renting, 58% of prospective homebuyers said that owning a home is the best long-term decision for them to gain control over their own living space.

Matt Vernon, head of consumer lending at Bank of America, said: “Given the highly competitive homebuying market, renters are unsure whether now is the right time to buy.

“The vast majority of prospective homebuyers overwhelmingly feel buying a home, now or in the future, is the best decision for them in the long run.”

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