The homebuying process can be complex—especially if you don’t read the documentation along the way.
The paperwork may be too cumbersome for some, according to a survey conducted by Porch.com, a home remodeling website, of nearly 1,000 recent home buyers. More than three in four homeowners said they didn’t completely understand the terms of their mortgage. Thirty percent of homeowners admit to reading none or only some of their mortgage documents and say they have regretted not reading them entirely. Fifty-seven percent of homeowners say their family advised them through the mortgage process, not a lender or financial planner.
Many have similar regrets about not researching their home insurance policy. Nearly 37% of homeowners read none or only some of their homeowners insurance policy before signing it. The same percentage also said they didn’t completely understand what their homeowners insurance policy covers.
Home buyers are relying on others to double-check items for them throughout the process. Sixty-one percent of homeowners said they usually asked another person to read over their important home policies before they signed them.
But the lack of due diligence as they read the fine print, or their decision to rely on others, may be making buyers less confident. First-time home buyers are more than three times as likely as previous homeowners to say they feel unprepared to buy a home, according the survey.
“Whether you’ve bought 10 homes or zero, research, not experience, is crucial for home buying,” the study notes. “Regrets and expensive financial mistakes were not often due to inexperience, but instead not taking the time to consult experts or research better options.”
Source: “Where Did You Find It?” Porch.com (2020)
