Homebuyers’ Mortgage Decisions: A Survey Reveals Surprising Insights

Are you planning to buy a home? If so, you’re likely to be thinking about the best mortgage options for your needs. A recent survey by ICE Mortgage Technology provides some surprising insights into the mortgage decisions of homebuyers. In this article, we’ll explore the key findings of the survey and provide some practical tips to help you make an informed decision.

The Importance of Finding the Lowest Rate

According to the survey, finding the lowest interest rate is the most important factor for homebuyers when choosing a mortgage lender. This is followed closely by speed and having a variety of loan terms and products to choose from. It’s no surprise that 68% of respondents said finding the lowest interest rate was the most important factor, given the significant impact it can have on the total cost of the mortgage.

The Impact of Comparison Shopping

The survey also found that 84% of homeowners who took out a mortgage in the last five years only considered one or two lenders before closing the deal. This is despite the fact that shopping around for the best rate can result in significant savings. For example, Freddie Mac research has shown that borrowers who obtain two rate quotes can save as much as $600 a year on their mortgage payments, while getting at least four rate quotes can save more than $1,200 a year.

Why Don’t Homebuyers Shop Around?

So, why don’t homebuyers take the time to shop around for the best mortgage deal? According to a survey by Zillow Home Loans, the main reasons are:

• 30% worry that getting multiple quotes will hurt their credit score
• 24% are happy with the first lender they contacted
• 19% say it takes too much time and effort to shop around
• 15% think all lenders offer the same rates
• 14% are embarrassed to share their financial information with lenders

Tools to Help Homebuyers Shop Around

Fortunately, there are several tools available to help homebuyers shop around for the best mortgage deal. For example, mortgage product and pricing engines make it easy to get custom rates from multiple lenders. Additionally, credit bureaus won’t penalize borrowers who rate shop within a focused period of 30-45 days.

Conclusion

The survey by ICE Mortgage Technology highlights the importance of finding the lowest interest rate and shopping around for the best mortgage deal. While some homebuyers may be hesitant to shop around due to concerns about credit scores or embarrassment, the potential savings make it well worth the effort. By understanding the key factors that influence mortgage decisions and taking advantage of the tools available, homebuyers can make informed decisions and save thousands of dollars over the life of their mortgage.

FAQs

Q: What is the most important factor for homebuyers when choosing a mortgage lender?
A: Finding the lowest interest rate is the most important factor for homebuyers, followed closely by speed and having a variety of loan terms and products to choose from.

Q: Why don’t more homebuyers shop around for the best mortgage deal?
A: Some common reasons include worrying about credit scores, being happy with the first lender they contacted, and feeling it takes too much time and effort to shop around.

Q: Are there any tools available to help homebuyers shop around for the best mortgage deal?
A: Yes, mortgage product and pricing engines make it easy to get custom rates from multiple lenders, and credit bureaus won’t penalize borrowers who rate shop within a focused period of 30-45 days.

Q: Can shopping around for the best mortgage deal really result in significant savings?
A: Yes, research has shown that shopping around for the best mortgage deal can result in significant savings, with borrowers who obtain two rate quotes potentially saving as much as $600 a year on their mortgage payments, and borrowers who get at least four rate quotes potentially saving more than $1,200 a year.

Author: www.inman.com

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