Why You Should Shop for Your Mortgage Lender

High-income borrowers are more apt to shop for loans and negotiate terms.

Shopping around for a mortgage lender can bring substantial savings, yet recent survey results from Fannie Mae reveal that one-third—36%--of homebuyers considered only one mortgage quote.

This figure is largely unchanged since 2014, although “many consumers would benefit by devoting more time to researching mortgage costs and comparison shopping when buying a home.”

Why do some shoppers forgo mortgage shopping?  Thirty-nine percent feel comfortable with the lender they asked for a quote, and 29% noted “satisfaction with the first quote they received.”

Buying a home is a complex, stressful process, and first-time homebuyers might feel overwhelmed with the many parts and pieces in comparing mortgages.  It may simply be easier to make a quick lending decision and get on with the business of house hunting.

Still—a third of repeat buyers only solicit one mortgage quote.  According to Fannie Mae, these home shoppers may be “less price sensitive”, although additional research needs to be completed for this group.

Another interesting statistic is that 33% of recent homebuyers attempted to negotiate a mortgage rate, versus 40% who did so in 2019’s first quarter.  Low interest rates and a tight housing market may have been factors for later borrowers.

Overall, higher income buyers were more apt to mortgage shop and attempt to negotiate loan terms.

Of those who mortgage shopped, the most important points of comparison were interest rates, monthly payments, and estimated closing costs.

Post authored by Lora Bray.

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