Survey says buyer’s remorse.
Seventeen percent of millennial and Generation Z homebuyers from ages 18-34 regret purchasing a home instead of renting, according to a Zillow survey.
Speculating as to why, Josh Lehr, industry development at Zillow-owned Mortech, said getting the wrong mortgage may have driven that disappointment. For example, the Zillow survey showed 22% of young buyers had regrets about their type of mortgage and 27-30% said their rates and payments are too high.
Lehr pointed out that 57% of the millennials shopped lenders online. Yet, they didn’t know what they didn’t know regarding the details of various financing instruments and finding the best fit for them.
My suggestion for any would be first-time buyer is to ask five of your closest homeowner friends what mistakes they made and what regrets they had (if any) when they were mortgage shopping for the first time.
Perhaps more importantly, ask them what they did especially well or what were they most proud of as part of their first mortgage shopping adventure.
Separately, Harris Poll conducted a consumer survey on behalf of technology company Fiserv. Here are the top five highlights for choosing a mortgage or home equity-line-of-credit lender:
- 50% cited the interest rate as a reason for choosing a lender
- 39% cited low fees as being important
- 37% cited customer service and company reputation
- 29% cited knowledgeable staff
- Lastly, a whopping 31% of mortgage applicants were not highly satisfied with the mortgage process because it took too long, involved too much paperwork, interest rates, fees and origination charges were too high or poor communication from the lender.
For those non-homeowners, why didn’t they purchase? According to the Harris Poll:
- They didn’t have enough for a down payment (31%)
- Not interested (24%) or they’re happy renting (19%)
- Bad credit (20%)
- It is too expensive to buy (20%)
How did borrowers begin their search?
- Online (30%)
- Recommended by real estate agent (29%)
- Contacted primary financial institution (27%)
- Considered previous lender (26%)
- Referral from family (23%)