First-time homebuyers must overcome many struggles like saving for a down payment and high home prices — some challenges may even drive them to stay out of the market altogether. A recent survey by FreeandClear.com discovered that many first-time homebuyers in America are also facing another challenge: a lack of fundamental knowledge of mortgages and the home-buying process.

The mortgage education site found that 20 percent of borrowers think it is impossible to purchase a home with a down payment of less than five percent, according to the Washington Post. However, VA loans have no requirement for down payments, the FHA loan program only requires 3.5 percent, and traditional loans offer three percent down payment options. 

According to the survey, the primary source of information about mortgages is the internet, with 24 percent of borrowers researching mortgages online. Only two percent of borrowers reported learning about mortgages from the Consumer Financial Protection Bureau (CFPB). 

Borrowers are often advised to browse through different home loans to make sure they are getting the best deal. Results showed however that 30 percent of borrowers chose to work with their existing bank, while 29 percent selected a lender based on their real estate agent’s referral. These could both be good options for homebuyers, but it is important to ensure there are not better deals around. 

There were some signs of buyer savvy, however. In one survey section, borrowers showed cautiousness when borrowing. And when asked what percentage of a homebuyer’s gross income should be allocated to housing expenses and debt repayment, half responded 34 percent, which is less than the maximum allowance of 43 percent for most mortgages. 

The survey also asked about whether borrowers are aware of the role Fannie Mae plays in mortgage financing. Most survey takers knew about Fannie Mae’s part in supporting home loans. However, 11 percent of borrowers answered incorrectly.

It turns out that many borrowers could use a refresher on mortgages, such as a breakdown of pre-mortgage approvals, or how student loan debt affects your mortgage rate.