Unfamiliarity hinders homeownership
Financial education key to achieving dreams
FOR IMMEDIATE RELEASE
April 17, 2006
Liz Christopher (614) 249-7705
Columbus, Ohio– A new survey confirms that like most renters across the nation, renters in Columbus dream of owning their own home, but currently don’t because they are unfamiliar with the buying process. The consumer poll, released by Nationwide Advantage Mortgage Company, uncovered how a lack of financial education in regard to mortgage fees and points can hinder renters in their pursuit of the homeownership dream.
The survey found that about 80 percent of renters surveyed in Columbus don’t understand mortgage fees and points very well. In addition, nearly 70 percent of those surveyed plan to purchase a home in the next few years, making financial education about the home buying process more important than ever.
“It is critical that homebuyers arm themselves with all the information about the home buying process and the types of products available in order to prevent entering into a potentially disastrous situation,” said Paul Swan, President of Nationwide Advantage Mortgage. “The more consumers know about the process and products ahead of time, the less likely they are to fall into a situation that they can’t afford.”
According to Swan, there are things that potential homeowners can do to educate themselves before they start looking for a new home:
- Know what lenders are looking for – Typically, lenders will look at a borrower’s creditworthiness as demonstrated by their credit history, the value of any assets pledged as security for a debt, their capacity to repay the debt and the amount of money a borrower has to use for a down payment, closing costs and other incidental expenses.
- Understand how fees affect a mortgage rate – A lender may offer a low rate, but the actual borrowing cost could be significantly higher if the lender charges high points and fees, including loan origination costs, application and credit fees and appraisal costs. The best way to compare actual offers is to look at the annual percentage rate (APR), which includes the loan’s interest rate and the added cost of obtaining the loan.
- Brush up on the mortgage product requirements – Make sure that you know what the minimum down payment is and if the product requires a monthly mortgage insurance premium. Understand the difference between fixed rate, adjustable rate and balloon mortgage products and how they can affect your mortgage payments long term.
“Professionals need to educate their customers on all the aspects of a mortgage,” said Swan “At Nationwide Advantage Mortgage, we want to be a trusted resource for consumers.
Nearly 70 percent of renters in Columbus said financial reasons were preventing their pursuit of homeownership. However, with a better understanding of mortgage rates, fees and points, they may realize that owning a home can be obtainable.
The survey of 1591 adult homeowners and renters from Charlotte, NC, Raleigh, NC, Columbus, OH, Des Moines, IA and Las Vegas, NV was conducted in March using MarketTool’s® ZoomPanel, an online consumer panel. The survey targeted men and women 25-54 who were homeowners or renters. The survey has a margin of error of plus or minus 5 percentage points.
About Nationwide Advantage Mortgage Company
Nationwide Advantage Mortgage Company has originated, marketed and serviced single-family residential loans at its West Des Moines headquarters since 1987. It currently offers mortgage products and services in 49 states and the District of Columbia. Local loan officers currently serve Charlotte; Raleigh; Wilmington; North Carolina; Columbus, Ohio; Chicago; Des Moines and Las Vegas. Nationwide Advantage Mortgage is a subsidiary of Nationwide, one of the largest insurance and financial services companies in the world with more than $158 billion in assets. Nationwide Advantage Mortgage prides itself on speed, simplicity and savings. Its mortgage solutions feature free 10-minute loan decisions, competitive rates, reduced fees and a dramatically simplified application process. For more information, visit www.NationwideAdvantage.com.
Nationwide, based in Columbus, Ohio, is one of the largest diversified insurance and financial services organizations in the world, with more than $158 billion in assets. Nationwide ranks #98 on the Fortune 100 list. The company provides a full range of insurance and financial services, including auto, homeowners, life, commercial insurance, administrative services, annuities, mortgages, mutual funds, pensions and long-term savings plans. The Nationwide companies include the country’s seventh-largest property/casualty, the fourth-largest homeowners, the sixth-largest auto insurance group and the country’s largest farm owners insurer. Nationwide Life Insurance Company, the major subsidiary of Nationwide Financial, ranks 11th in assets according to A.M. Best. For more information, visit www.nationwide.com.
Nationwide and the Nationwide Framework are federally registered service marks of Nationwide Mutual Insurance Company. On Your Side is a federally registered service mark of Nationwide Mutual Insurance Company.
Nationwide Advantage Mortgage Company 7760 Office Plaza Drive S. West Des Moines, IA 50266-2336