The housing market is beginning to heat up and as house hunters go door-to-door, many of them are completely unprepared to strike.

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A recent survey by real estate website Zillow asked basic questions about mortgage terms, how to choose a lender and financing and respondents answered the questions wrong nearly one-third of the time.

Among the findings, 31 percent of buyers don't think it's possible to get a mortgage for less than five percent down, 34 percent don't know what the term "annual percentage rate" means and one in four believe you have to close with the lender that pre-approves your mortgage.

"Most people didn't know that basic fees, like credit reports and appraisals, were negotiable. Not knowing that basic fees are negotiable puts consumers in a position where they don't really think to shop around," said Erin Lantz, Director of Zillow Mortgage Marketplace. "Many didn't realize that mortgage rates change all the time, all day long and frequently change multiple times a day."

Mortgages are Confusing

"It's no surprise that mortgages are confusing and complicated and we expected consumers to be ill-informed about a number of things," said Lantz. "It was very surprising to see the extent to which they were confused about pretty basic mortgage fundamentals including the mortgage process and mortgage terms. Being educated about the process is the first step toward getting the best deal and having a smooth and enjoyable process."

When people are in the moment of buying a home, it's very easy to get caught up in the new place and the neighborhood.

"The mortgage sometimes becomes the last step that is neglected until it absolutely needs to be dealt with," said Lantz. "So, we're trying to inform consumers that there is a great deal they can learn in advance so that when it comes to handling the financial part of this big decision, they can actually be prepared and save a lot of money."

So, what can a potential homebuyer do to become more educated on mortgages and the entire process?

"It pays to shop around, it pays to educate yourself in advance. If you're not the kind of person who wants to do your own research, find a lender who will take the time to answer your questions and one that you trust. Don't assume that you don't have options until you talk to someone," said Lantz.