Survey: Fail to Shop Around for Mortgage, It’s Your Loss
August 6, 2019
More than a third of home buyers say they did not shop around before selecting their mortgage lender, according to new findings from Fannie Mae’s National Housing Survey. That may mean they’re missing out in thousands of dollars in savings.
Real estate professionals, with family and friends, may be among the most influential sources of advice regarding lender selection, notes Doug Duncan, Fannie Mae’s chief economist, in a new column at Fannie Mae. As such, they may have a key role to play in encouraging homeowners to seek multiple offers when mortgage shopping.
Recent buyers surveyed say they received only one quote because they were more comfortable with the particular lender they chose. They also said they had less concern with competitive terms when selecting a lender and put more weight on other priorities like customer servicen responsiveness, and having an account with a lending institution.
Comparison shopping for a mortgage can also be time-consuming and complicated. “Simply evaluating the ‘price’ of a mortgage involves looking at several interrelated components—including rates, fees, and points—and making an assumption about how long a borrower will stay in that mortgage,” Duncan notes. “While it’s easy to find ‘teaser’ rates advertised online, a true mortgage quote is based on a handful of variables that are unique to each buyer and evaluated differently by each lender.”
Credit history, down payment, and the ratio of monthly debt payments to income are usually given the most weight in determining a mortgage offer.
But home shoppers may want to factor in the potential cost of failing to shop around. A separate study from LendingTree released earlier this year found that home buyers stand to see a median lifetime savings of $40,959 in interest on a $300,000 loan by comparison shopping.
Updated: November 25, 2020