Most homebuyers do not shop around when considering a mortgage, according to a new data study from LendingTree (NASDAQ:TREE).
In a survey of 2,001 U.S. consumers, over half of the respondents (54%) who took out a mortgage for their most recent home purchase only got one loan offer, while only 22% got two offers and 17% got three or more.
Among the respondents, baby boomers were the least likely to comparison shop (28%) while millennials were the most likely (62%). Women (62%) were more likely than men (46%) to accept the first offer without shopping around.
As for those who shopped around for a mortgage, 45% said the lowest offer did not come from their first lender while 46% of those who got a mortgage went with whom they did not have a prior relationship.
In comparison, refinancers were more active comparison shopping – among the 45% of respondents who refinanced the mortgage on their current home, 56% shopped around. And most of those seeking comparisons were rewarded – 81% found a lower rate than their current lender offered.
“Different lenders can offer different rates to the exact same borrower,” said Jacob Channel, LendingTree senior economist. “With that in mind, the first rate you’re offered may not be the lowest one you can get. The more offers you can look at, the better.”
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Borrowers have been advised to shop around without any instructions on how to do it
There is more to consider than who offers the lowest rate. That low rate come with discount points. Not necessarily bad if the Borrower knows how the evaluate.
There is a lot of discrepancy when closing cost and prepaid expenses are compared. One company May state 3 months for taxes and one for insurance resulting in the appearance of a lower amount of money needed
This also applies to so called estimated stated for other cost, such as appraisal, title and escrow fees
Lastly, on a purchase, can the selected company meet the purchase contract
It is best to work with a loan officer who has been referred