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CAMPBELL, Calif. – Feb. 9, 2011 – Getting a mortgage today is so difficult that two out of three Americans (70.6 percent) consider it a serious problem, according to a national survey released by MortgageMatch.com, a website under Move Inc., a company that also oversees the National Association of Realtors®’ (NAR) Realtor.com.

Mortgage process

According to survey responses, understanding the mortgage process and coping with lenders’ requirements are the most challenging aspects of getting a mortgage today. Survey respondents ranked it more challenging (32.3 percent) than getting the mortgage itself (23 percent) or negotiating the sale price on the home (25.3 percent). In addition, three out of four (79 percent) recent homebuyers, especially those earning $50,000 a year or more, said getting a mortgage was as difficult, or more, than they expected.

The survey found that today’s lending environment is so confusing that many borrowers experience high levels of stress and frustration, accompanied by the potential for distrust. One in five recent homebuyers (20.9 percent) said that waiting to hear if they were approved for a mortgage caused more stress than waiting to hear if they got a job.

One in 10 borrowers (10.8 percent) say that their lender charged them a higher interest rate than what they were originally quoted, and 9.1 percent said their lender asked for seemingly inappropriate information. Almost twice as many female buyers (11.7 percent) as male buyers (6.4 percent) said they were asked for inappropriate information.

Adding to the confusion, nearly one-quarter (22.9 percent) said their lender’s documentation requirements kept changing. One in five borrowers (21.6 percent) said their lender used too much technical jargon, and 20.7 percent said finding a lender that was easy to work with proved challenging. Borrowers considered these particular problems more challenging than the amount of time it took to fund a loan (19.1 percent) or problems in qualifying due to their credit rating (6.9 percent).

In spite of frustrations and confusion, many recent buyers said they successfully secured loans and purchased homes in the past three years. Most were highly qualified buyers, with just over half (54.6 percent) reporting they had FICO scores exceeding 700. More than two-thirds (67.7 percent) of the survey respondents that successfully took out a mortgage said they put down less than 20 percent of the purchase price.

“This survey is a wakeup call and clearly points to the fact that borrowers want a process that’s easy to understand and follow. They don’t want surprises and they want to be able to depend on their mortgage lender. For most people, the homebuying process isn’t about the mortgage – it’s about getting a home,” said Sue Stewart, senior vice president at Move Inc.

First-time buyers

Stewart points out that the survey found strong evidence that first-time buyers will continue to be an important group in the next 36 months. According to the survey, three out of five (58.4 percent) Americans planning to purchase a home in the next three years identify themselves as first-time buyers. That’s significantly higher than the current market share of 33 percent, and a 21 percent increase from a Move Inc. survey taken in October 2009.

At the same time, the survey found that first-time homebuyers are significantly more concerned than other buyers about the problems they face in getting a mortgage today by almost 13 percent.

Public policy

Public concern over mortgage financing also extends to public policy in 2011, but support for direct government intervention has softened since the height of the credit crisis in 2008. Americans now say President Obama’s top priorities should focus on helping at-risk homeowners avoid foreclosure (27 percent) and keeping interest rates low (27.9 percent).

Only 12.9 percent feel the president’s top priority should be to make more affordable housing credit available.

© 2011 Florida Realtors®