Don't Celebrate Mortgage When You Don't Know What You're Doing

NEW YORK (TheStreet) -- You can't blame a first-time homebuyer for being giddy about landing that mortgage turning them from a renter to an owner.

But once the excitement subsides and the champagne wears off, new mortgage holders are left with the realities of the process, which can be overwhelming. It gets even worse for mortgage applicants before a loan is approved, many of whom are unprepared to strike the best deal possible -- if they can get one at all.

A study from Discover Home Loans shows that while 87% of mortgage applicants believe they will ultimately get a home loan, 63% say they are overwhelmed by the amount of mortgage information available.

Also see: Mortgage Rates Could Ruin Summer Home-Sales Hopes

Some additional takeaways from the study show Americans can get in over their heads quickly during the mortgage process. While the vast majority of mortgage shoppers believe they have a good grasp on the type of home they can afford:

  • 41% haven't even calculated a down payment.
  • 48% say they "don't know how much their mortgage payment would be if they chose a more or less expensive property."
  • The younger you are, the mortgage confused you are, as 76% of mortgage applicants under 30 say they are "overwhelmed."
  • 76% of first-time buyers reported feeling overwhelmed, but only 54% of those who have previously owned.

The rule is to know what you can afford before you apply for a mortgage, and know what lenders want before applying. 

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