By John Voket
I am always thrilled to hear when folks make the jump to homeownership. And it’s important for prospective homeowners to know about all the resources available to them to help the experience go as smoothly as possible, especially when it comes to financing.
In the first of this two-part report we clued potential homeowners in on the U.S. Consumer Finance Protection Bureau’s new (consumerfinance.gov) report that featured some revealing data – particularly that almost half of consumers do not shop around for a mortgage when purchasing a home.
Among the key findings were:
- Almost half of consumers who take out a mortgage fail to shop prior to filling out an application for a mortgage.
- While half of consumers shop around to see who advertises lower rates, fewer than one in four actually end up submitting a loan application to more than one lender or broker – NOT filling out applications with multiple lenders to see which one can offer them the best deal.
- 70 percent of consumers report relying on their lender or mortgage broker a lot to get information about mortgages.
- The survey found that among all borrowers – those who shopped and those who did not – 42 percent said having an established banking relationship with the lender is “very important.” Since most borrowers likely only have a few banking relationships, this likely inhibits shopping.
- Consumers who are confident in their knowledge about the mortgage process are more likely to shop around.
- Consumers who are confident about their knowledge of available interest rates are almost twice as likely to shop as consumers who are unfamiliar with available interest rates. The survey found that 55 percent of shoppers said they were very familiar with mortgage rates, while 30 percent of shoppers said they were not at all familiar.
Following this report release, as part of its “Know before You Owe” mortgage initiative, the CFPB announced it was releasing “Owning a Home,” an interactive, online toolkit designed to help consumers as they shop for a mortgage.
Anyone in the process of – or anticipating buying a home in the near future can access this virtual toolkit by clicking here.