Mortgage applications are a real pain on the brain, consumers say.

But rather than chance having your loan application denied because you don't understand it, get some help completing it.

"Fill out the application in coordination with an experienced loan officer," says Sean Sullivan, vice president of Princeton Capital in Los Gatos, CA.

Applying for a home loan begins with what should be the simple task of filling in the blanks, but consumers say the applications are more perplexing than completing income tax returns, health insurance benefit forms, reading investment account statements and pouring over the stock market listings in the local newspaper.

It's no wonder their eyes glaze over when it's time to sit down to go over the settlement sheet and other loan documents necessary to close the loan -- which is even more daunting, says Sullivan. However, mortgage applications were most often rated the documents most "difficult to understand" when brand strategy firm Siegel & Gale asked a randomly chosen group of 1,709 consumers aged 18 and older to rate how easy it is to read and understand documents they had actually encountered in the past 30 days.

The five commonly used documents rated most "difficult to understand" were:

• Mortgage applications, 60 percent.

• Health insurance benefits forms, 57 percent.

• Federal income tax returns, 48 percent.

• Newspaper stock market listings, 46 percent.

• Investment account statements, 42 percent.

"Perplexity Poll: Americans Befuddled By Business Documents and Health Care Communications," reveals consumers are befuddled by a host of financial documents including insurance documents that explain benefits and financial investment statements, as well as contracts and leases, product instruction manuals and computer-related documents.

"This survey reinforces the findings of our previous Perplexity Polls over the past 20 years. Americans continue to find many of the most common and important documents they receive to be extremely confusing. When 60 percent of the respondents rate mortgage applications and explanations of health insurance benefits as difficult to understand, it's shocking," said Alan Siegel, chairman of Siegel & Gale.

Consumers have an easier time understanding nutrition labels on food products, car manuals, wireless phone bills, airplane safety instruction cards, catalog order forms, checking account statements, credit card statements, payroll stubs and energy labels on appliances.

The study found that a complex layout was cited as what often makes documents difficult to understand and making applications easier to follow could help.

"The degree of perplexity uncovered in the insurance, financial and legal sectors don't bode well for a population that is being asked to take responsibility for its own retirement and health care decisions," said Siegel.

Experts have long advised consumers to seek help with mortgage documents because consumers don't encounter them as often as pay stubs, phone bills, nutrition labels and the like. Also incorrectly completing a mortgage application can lead to loan denial, higher rates and other problems getting the application approved.

"It can take me 10 minutes to get the information I need from consumers. It can take them two hours because they often take things so technically," said John DeKoven, president of Platinum Lending Corp. in Pleasanton, CA.

One of the dangers is reporting too little income, say net income instead of gross income.

"If someone says they make $3,400 (net) when they really make $5,000 a month (gross) and I put the application through, he could be declined," said DeKoven.

Likewise over reporting income could more than just raise eyebrows.

"If someone is self-employed and he says he makes $100,000 and then we get his tax returns and they show only $50,000, well that can hurt," DeKoven added.

Experts also say confused consumers should especially think twice about completing applications online without assistance from a trusted, knowledgeable family member, friend or expert.

"Especially if you are a first-time home buyer, get some help," said DeKoven.

Published: August 26, 2004

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Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.