According to a survey in 2014, a majority of home buyers seek information on mortgage choices from sources that have a stake in their decision, such as Real Estate agents and bankers. Only 20 percent of the people surveyed said they rely heavily on websites, despite all of the free mortgage related information on the internet. Even worse only 2 percent seek a lot of information from housing counselors.
Americans may be spending more time shopping for cars, a TV, or new pants than for a mortgage, a report from the Consumer Financial Protection Bureau suggests. Half of consumers seeking a loan to purchase a home do not normally shop lenders.
This will cost the consumer on average around $60 more per month on a 30-year mortgage for $200,000 at an interest rate of 4.5 percent versus someone comparing online and borrowing at 4 percent. In addition, the borrower with the less expensive loan will also build equity faster according to the report.
While people put a lot of thought into the home they are most likely ready to be done with the entire process and are intimidated by the complexity of the mortgage. Although more about mortgages should be taught in high school instead of things like algebra and calculus. People need to know more how to deal with life decisions and learn how to research for the obvious savings and shop around for a better deal.
Most Americans just follow the herd or do what they are told from their agent selling the home because they feel they can trust them. Shopping around can be hard when the rates change frequently. There is a bait-and-switch on rates between online/phone and written documents which can get tiresome but it is still best to compare.
Consumers should absolutely shop for a loan especially first-time home buyers. Just doing some online comparisons and showing your lender hoping they will reduce the rate could work to your advantage as well.