Many buyers don’t comparison shop for a mortgage
WASHINGTON, D.C. – Jan. 13, 2015 – The Consumer Financial Protection Bureau (CFPB) released a report on mortgage borrowers, and it found that almost half of consumers don’t shop around for a mortgage when purchasing a home.
In tandem with the report, the CFPB released “Owning a Home,” an interactive, online toolkit designed to help consumers shop for a mortgage. It says the suite of tools gives consumers the information they need to get the best deal.
“Consumers put great thought into the choice of a home, but the mortgage process continues to be intimidating,” says CFPB Director Richard Cordray. “The Know Before You Owe Owning a Home toolkit makes it easy to see how shopping for a mortgage can translate into big dollars saved in the long run. We want to enable consumers to be more savvy shoppers.”
Today’s report is based on results from the new National Survey of Mortgage Borrowers, a voluntary survey jointly conducted by the CFPB and the Federal Housing Finance Agency (FHA). The Bureau analyzed responses from consumers who took out a mortgage to buy a home in 2013. Among the key findings:
- Almost half of consumers fail to shop prior to filling out an application for a mortgage. This means these consumers are seriously considering only a single lender or mortgage broker before choosing where to apply.
- Three out of four consumers only apply with one lender or broker: While half shop around to see which lender advertises lower rates, fewer than one out of four borrowers apply to more than one as a way to compare bottom line rates and their best deal.
- Most consumers get information from lenders or brokers, who have a stake in the outcome: 70 percent said they relied on their lender or mortgage broker a lot for information about mortgages.
- Borrowers who prioritize the terms of the loan over the characteristics of the lender are more likely to shop around
- Consumers who are confident in their knowledge about the mortgage process are more likely to shop around: 55 percent said they were very familiar with mortgage rates, while 30 percent of shoppers said they were not at all familiar.
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