Mortgage documentation is too cumbersome for far too many homeowners, according to a survey carried out by the home remodeling website Porch.com.
The survey of almost 1,000 recent home buyers found that more than 75% said they didn’t completely understand the terms of their mortgage. Moreover, some 30% admitted to reading none or only some of the terms, and said they regretted not reading the documentation entirely. And 57% of buyers said they only went to family members for advice, rather than a lender or a financial planner.
Many homeowners have similar regrets about not reading through their home insurance policy properly, the survey found. Almost 37% said they read none or only some of their policy before signing it. And another 37% said they didn’t completely understand what the policy does and does not cover.
Interestingly, most home buyers do rely on other people to check various items for them throughout the mortgage application process. The survey found that 61% of respondents usually asked another person to read over the documentation before signing it.
However, a lack of due diligence when reading the fine print, or leaving the decision to others, makes buyers less confident, the survey found. Porch.com said first time buyers are three times more likely than repeat buyers to feel unprepared when it comes to buying a home.
“Whether you’ve bought 10 homes or zero, research, not experience, is crucial for home buying,” the study noted. “Regrets and expensive financial mistakes were not often due to inexperience, but instead not taking the time to consult experts or research better options.”