Survey shows consumers don’t comparison shop for mortgages

A survey conducted by Harris Interactive, for Lending Tree, shows that consumers do not comparison shop when it comes to their home mortgage, instead borrowers often “lock in” their first home loan offer. The survey shows 96 percent of consumers compare prices when shopping for anything, but nearly 40 percent obtain just one home loan quote. An interesting comparison given was when shopping for a home computer, consumers check out and research an average of 3.1 models before making a purchase. This probably helps explain why, according to the survey, only 28 percent of borrowers stated they were “very confident” they received the best possible deal on their current mortgage.

The survey showed 85 percent of consumers use the web to comparison shop, but only 21 percent shopped online first for mortgage rates. Additionally, although nearly 40 percent obtain just one home loan quote, 91 percent understand interest rates vary between lenders.

“Choosing a mortgage is probably the most important financial decision most of us will ever make, yet many consumers simply take the first offer that comes their way,” said Doug Lebda, Chairman and CEO of LendingTree. “It’s a gamble that leaves many borrowers uncertain they’ve received the best deal on their mortgage. Our research clearly shows that home buyers and homeowners need help navigating the often complex world of home loan financing.

Frustration also appears to be at the root of this shopping dilemma. According to the survey, 70 percent of borrowers find shopping for a mortgage frustrating, citing the complexity of the terms (21 percent) and time-intensiveness nature of the process (20 percent).

Other survey highlights:

  • Seventy-two percent of homeowners spent the equivalent of a full working day or less shopping for their home loan.
  • Twenty-three percent of homeowners recognize they could save more than $100 a month by reducing their mortgage rate by one percent. According to LendingTree data, consumers can save about $208 per month, by reducing their rate from 5.5 percent to 4.5 percent on a $250,000 loan.
  • Women are more than twice as likely as men to say they were not at all involved with shopping for their mortgage or when refinancing (16 percent versus seven percent, respectively).
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