New Home, New Expenses: First Time Home Buyers Change Their Lifestyle to Afford Home Ownership

BIRMINGHAM, Ala., April 13 /PRNewswire-FirstCall/ -- BBVA Compass today released a new survey on First Time Home Buyers indicating that, prior to purchase, a vast majority of First Time Home Buyers (88%) believe that they have accounted for all expenses related to owning a home. Seemingly contradicting that notion, amongst those who had purchased a home in the past 12 months, just over half indicate that the expenses were more than they had calculated, causing a change in lifestyle. These results came from the BBVA Compass First Time Home Buyers Online Survey which polled American consumers about the thoughts, emotions and hurdles related to owning and enjoying a first home.

Regarding potential First Time Home Buyers, key findings included:

• Nearly one third have anxiety over the affordability of owning a home.
• 7 in 10 indicate that the First Time Home Buyer's Tax Credit has not truly factored into the timing of when they decide to purchase a home.
• Ninety-two percent of respondents indicate that having additional time before their first payment due date would be helpful.

Regarding First Time Home Buyers who have purchased a home in the previous 12 months, key findings included:

• Fifty-one percent indicated that the monthly expense of owning a home was more than they calculated.
• Although 7 in 10 respondents said that the unexpected expenditures leveled out over time, another eighty-seven percent said that they changed their lifestyle as a result of the additional expenses.
• Nearly one third indicated that they paid for these unexpected expenditures with a mixture of cash and credit, perhaps indicating a lack of liquid funds.

"Owning a home is still the definition of the American Dream," said Shelaghmichael Brown, BBVA Compass senior executive vice president and head of Retail Banking. "Yet, while the dream is alive and well, the expenses associated with owning a home can be surprising. As a financial institution, BBVA Compass is committed to educating consumers, with clarity and transparency, on the true costs of homeownership."

Also among the findings of the BBVA Compass First Time Home Buyers Online Survey was information related to the actual process of purchasing a home. Potential First Time Home Buyers indicated that when looking for financing on their new home purchase, the item that will be most important to them, but likely also the most confusing aspect, is understanding the process. Ultimately, the First Time Home Buyer is seeking someone who will provide clarity through each step of the process, from loan options to factors that might affect the rate obtained.

Both segments of First Time Home Buyers were also overwhelmingly in favor of mortgages that allow breathing room between closing and the due date of the first payment. With this financial cushion, the First Time Home Buyer indicated that they would be in a better position to pay off credit cards and other bills, as well as make some of those unexpected purchases (household items and improvements) that come along with owning a home.

"Obtaining a mortgage can be a very confusing and expensive process, particularly for the First Time Home Buyer," said Jon Mulkin, executive vice president and director of consumer asset products. "The more clarity, transparency and help in making the financial transition from renter to buyer that banks can provide, the better positioned the consumer will be going into long-term homeownership."

The BBVA Compass First Time Home Buyer Mortgage

The BBVA Compass First Time Home Buyer Mortgage is a product designed with the First Time Home Buyer's needs, both pre- and post-purchase, in mind. The product features a host of online resources that guide the buyer through the purchase process, a required financial literacy course to help them understand the financial commitment being made and a mortgage with terms that allow some early financial breathing room so that the buyer can truly make their new house a home.

Features of the First Time Home Buyer Mortgage include:

• One posted rate
• First payment is not due for three months
• No lender fees (Includes PMI, Origination, Processing, etc.)
• As low as 5% down payment
• BBVA Compass Online Education Center (Includes educational videos, calculators, etc.)
• FDIC Money Smart Home Buyer Education Course

Each participant in the First Time Home Buyer Mortgage program will also receive a BBVA Compass "What To Expect". This communication is a simple document which concisely outlines each step of the mortgage process, from application to closing, along with helpful tips and documents needed along the way.

The BBVA Compass First Time Home Buyer Mortgage is available throughout BBVA Compass' seven state footprint, which includes Texas, Alabama, California, Arizona, Florida, Colorado and New Mexico. Interested consumers may learn more about the First Time Home Buyer Mortgage by visiting http://www.bbvacompass.com, calling 1-888-8-LENDING or requesting more information from their local BBVA Compass branch.

Research firm Qualtrics conducted the online survey of 300 First Time Home Buyers between February 21, 2010 and February 25, 2010.

ABOUT BBVA COMPASS

BBVA Compass is a Sunbelt-based financial institution that operates 724 branches including 387 in Texas, 92 in Alabama, 65 in California, 77 in Arizona, 45 in Florida, 36 in Colorado and 22 in New Mexico. BBVA Compass is the 15th largest U.S. commercial bank based on deposit market share and ranks among the largest banks in Texas (4th), Alabama (3rd) and Arizona (5th). Additional information concerning BBVA Compass can be found on our website http://www.bbvacompass.com.

BBVA Compass is a subsidiary of Compass Bancshares, Inc., a wholly owned subsidiary of BBVA (NYSE: BBVA) (MAD: BBVA). BBVA is a financial services group with more than $785 billion in total assets, 48 million clients, 7,600 branches and approximately 104,000 employees in more than 30 countries. BBVA ranks among the top 20 largest financial institutions in the world based on market capitalization and 20th in Global Finance magazine's list of the "World's 50 Safest Banks" for 2009. BBVA provides its customers around the world with a full range of financial services, including commercial and wholesale banking, retail banking services, consumer loans, mortgages, credit cards, securities brokerage, wealth management, pension plan management and insurance. The BBVA Group maintains a leadership position in Spain, Mexico, Latin America and the Sunbelt Region of the United States as well as operations in China, France, Germany, Hong Kong, Italy, Japan, Singapore, Switzerland, and the United Kingdom.

Editor's Note:

BBVA Compass is a trade name of Compass Bank, an Equal Housing Lender.

SOURCE BBVA Compass