TransUnion's TrueCredit.com Gauges American Sentiment on Mortgages

Do Americans really know how much their mortgages will cost them? With U.S. housing markets continuing to sag, TransUnion’s TrueCredit.com recently commissioned GfK Roper Public Affairs & Media to survey consumer perceptions and attitudes about mortgages. Sixty-two percent of Americans say they think the average homeowner with a 30-year fixed mortgage will make interest payments over the life of the loan totaling no more than 100 percent of the loan’s face value.

"By the end of a 30-year term, if
you a have a traditional fixed rate mortgage at 6.75%, you’ll actually pay closer to 150 percent more than the amount of the loan itself, just in interest," said Lucy Duni, Director of Consumer Education for TransUnion’s TrueCredit.com. "On a $200,000 mortgage, that would mean payments totaling $466,000. But with higher credit scores in hand, you have the potential to secure a lower interest rate, knocking tens of thousands of dollars off that number."

Worried About Monthly Payments

When asked about several common mortgage concerns, 24 percent of American homeowners with a mortgage say they are concerned most about the monthly cost of their mortgages and 13 percent are most concerned about owing more than what their home is currently worth. Eleven percent are most concerned about a possible increase in payments when their rates adjust up, and 7 percent are most concerned about not being able to refinance at all, because of their credit or financial situation.

"Reviewing your three credit reports and scores frequently and taking steps to maintain or improve your credit standing puts you in the driver’s seat when shopping for a loan," adds Duni. "All else being equal, the higher your credit scores, the lower your mortgage or home equity rate will be. That’s a fact."

Consistent Mix of Mortgage Types

The survey also finds fixed rate mortgages are the most common among homeowners, with nearly half (49 percent) reporting that they have this type of mortgage. Close to one in ten (11 percent) have an adjustable rate mortgage (ARM), and 8 percent have another specialized home loan. In a similar survey conducted in 2006, 51 percent reported a fixed-rate mortgage, 15 percent an ARM and 9 percent a specialized home loan.

Methodology

GfK Roper Public Affairs & Media conducted these studies using Random Digit Dialing (RDD) methodology. From May 4 to May 14, 2007, a total of 1,004 interviews were conducted among adults across America. Age, gender, income and geographic information were collected. The margin of error for the complete sample is +/- 3 percentage points. The margin of error for subgroups may be higher.