When you’re shopping for a home, you look carefully at each house you tour. You open cupboards, you listen for squeaky floors, you run your fingertips along countertops, and you test windows to make sure they’re open. You’re thorough and critical, comparison shopping, working hard to find the right home for you.
So, why aren’t you just as careful and selective when choosing a mortgage lender?
According to the U.S. Consumer Financial Protection Bureau’s (CFPB)’s 2018 Mortgage Shopping study:
“Mortgage interest rates and loan terms can vary considerably across lenders. Despite this fact, many homebuyers do not comparison shop for their mortgages. In recent studies, more than 30 percent of borrowers reported not comparison shopping for their mortgage, and more than 75 percent of borrowers reported applying for a mortgage with only one lender.”
Many mortgage shoppers base their choice off of trust. They ask a friend or family member or their real estate agent for a recommendation, thinking they’re doing their due diligence by finding a trustworthy lender. However, by doing some math, you can see that trustworthiness should only be a portion of what you consider when looking for a lender.
The CFPB’s survey shows that an astounding 77% of homebuyers are losing out on keeping thousands of dollars in their pockets, just because they don’t shop around and compare home mortgage lenders before making a choice.
Let’s say that the trustworthy lender your real estate agent referred you to offers you a 30-year-fixed mortgage for $200,000 home at an interest rate of 4.5%. Now, thinking you want to cover all your bases, you seek out another lender recommended by another friend and apply for the same loan. This lender offers you the same 30-year-fixed mortgage at an interest rate of 4%.
Half a percent…big deal, right? Actually, it really is. Just that seemingly small difference will save you almost $60 per month, putting an extra $3,500 in your pocket in 5 years. That’s a pretty significant family vacation right there, or a chunk of savings for sending your child to college! You’ll also pay off an additional $1,400 of your principal in your first five years.
That’s a pretty significant amount of savings, don’t you think? That’s why it’s so important for all homebuyers to start comparison shopping for mortgage lenders.
These significant savings lost by consumers across the country is why the U.S. Consumer Financial Protection Bureau ran and published the findings of their survey. They are the government’s highest authority formed with the sole intent of protecting consumer interests, and their findings should be heard and considered by the home-buying public.
The question is, how do you find the time to apply with multiple lenders? It’s not a quick, simple process, requiring 150+ pages per paper application. You have to go through multiple steps with each lender and submit a lot of information to obtain a quote. It takes time, organization, and patience.
Is there an easier way? Is there a site like kayak.com for mortgage lenders, instead of flights and vacations?
There is! With STEM Lending, you enter your information just once, then receive multiple mortgage offers at the click of a button. Comparing and shopping for home loans has never been easier. Weigh your options side-by-side and get help from one of our personal mortgage experts when you need it. Our team is committed to helping you shop for, choose, and close your mortgage with confidence and clarity.
If you have any additional questions, please give us a call at Stem Lending (833-600-0490), or email us at firstname.lastname@example.org. We’ll give you all the information you need to be an informed and successful home buyer.