Here’s a shocker. Only about 40 percent of borrowers obtain more than one mortgage quote, according to a survey conducted by Harris Interactive and mortgage comparison service LendingTree.
Despite this, more than nine in 10 borrowers understand that mortgage rates vary among mortgage lenders, which explains why only three in 10 felt “very confident” they received the best deal on their mortgage.
Borrowers Know Mortgage Rates Aren’t All the Same
- The survey found that the majority of borrowers
- Only took the time to get a single mortgage rate quote
- Even though they know lender rates vary
- Which explains why they didn’t feel confident they were getting the best deal
So we know most homeowners don’t bother obtaining more than one quote, and that they don’t feel great about it.
But why aren’t they shopping if they have a bad feeling about it all? There’s got to be a good reason, right? Well, of course there is.
Why Aren’t Homeowners Shopping Around?
- They aren’t quite sure the lender they spoke to is “the one”
- Yet they aren’t taking the time to see what else is out there
- One reason is time, or lack thereof
- Another big reason is the complicated nature of mortgages in general
Borrowers aren’t putting in the time to shop for a mortgage because of the time-sensitiveness associated, and also because of all the complicated terminology.
In other words, they’re often pressed for time either because they have a certain close of escrow date, or they need to refinance ASAP for one reason or another.
And if I had to guess, some of that urgency might come from the one mortgage lender they manage to speak to, who convinces them to “act fast” to avoid missing out on whatever it is they’re selling.
Most Put In the Equivalent of One Working Day
- For such a major financial decision
- Consumers sure aren’t putting in much time
- With most dedicating the equivalent of just one work day
- Shopping for their home loan
But for such a big decision, it’s rather startling that nearly three-quarters of borrowers only spend the equivalent of one working day or less shopping for their home loan.
LendingTree noted that one in 10 borrowers only spent the amount of time it takes to brush their teeth to research their mortgage options. That’s frightening, but at least they’re brushing their teeth.
Roughly a quarter of those surveyed said they recognized that they could save more than $100 on their monthly mortgage payment by reducing their mortgage rate by one percent, yet they don’t seem willing to put in the work.
Interestingly, women were twice as likely as men to say they were not involved with shopping their purchase mortgage or refinance loan.
Nearly All Americans Comparison Shop for Everything Else
- 96% of Americans comparison shop
- When it comes to a new TV, car, or even a pair of shoes
- Yet the numbers drop off considerably when it comes to a mortgage
- Consider that the savings associated with a cheaper home loan will stay with you a lot longer and probably be a lot more sizeable
The study noted that 96 percent of all Americans compare prices when shopping for just about anything – make sure that includes the mortgage for goodness sake!
Sure, it’s painful, time consuming, and no one wants to be badgered by pushy salespeople, especially if they aren’t comfortable with all the terminology, let alone numbers.
But even a little bit of work can pay off big. There are other studies that prove you can save thousands of dollars simply by gathering an additional mortgage quote or two. Might as well just dive in and do it right the first time.
After all, if you’re saving money month after month for year after year, you’ll probably feel pretty good for a long, long time too. You probably won’t get the same feeling clipping a coupon or getting a one-time discount.
In short, be sure to contact loan officers at neighborhood banks along with a couple of mortgage brokers so you’re aware of all your loan options. Also consider local credit unions and online mortgage lenders, both of which may offer lower rates than the competition.
Read more: What mortgage rate can I expect?