NEW YORK (MainStreet) – People may be committed to finding the best price on their Christmas presents, but they’re not putting the same time and effort into landing the best home loan.
According to a new study from LendingTree.com, nearly 40% of homeowners get just one home loan quote before settling on a mortgage, despite the fact that nine out of 10 borrowers (91%) understand that interest rates vary among lenders. Even though mortgage rates are at an all-time low, the small differences in rates from one institution to the next can mean thousands in savings.
When shopping for a home computer, consumers said that they research an average of 3.1 models before making a purchase. For all general purchases, 96% of respondents said that they comparison shop to get the best price. So why don’t they do it with home loans?
Nicole Hall, a spokesperson for LendingTree, called a mortgage a “complex financial instrument” and said that homeowners were reluctant to comparison shop primarily because they were intimidated by the process. In fact, according to the survey, 70% of borrowers confirmed that they found shopping for a mortgage frustrating, citing the complexity of the terms and time-intensiveness nature of the process as turn-offs.
As such, the study found that while 85% of consumers use the Web to comparison shop for other items, just more than one in five (21%) shop online first for mortgage rates.
And the worrisome stats don’t stop there. Nearly three-quarters (72 %) of homeowners said they had only spent the equivalent of a full working day or less shopping for their home loan and one in 10 respondents admitted they had spent the same amount of time searching as it takes to brush their teeth.