In spite of the potential savings a homebuyer can achieve from comparison shopping, a slim majority still aren’t shopping around, according to a new survey from LendingTree.
Fifty-four percent of homebuyers who took out a mortgage for their most recent home purchase only got one mortgage home offer. Just 22% got two offers, and only 17% received three or more. A mere 2% got four offers.
Yet 45% of homebuyers who shopped around got a lower offer the second time around.
“Different lenders can offer different rates to the exact same borrower,” Jacob Channel, LendingTree’s senior economist, says. “With that in mind, the first rate you’re offered may not be the lowest one you can get. The more offers you can look at, the better.”
Per LendingTree’s survey, women are more likely than men to accept the first offer without shopping around, with 62% and 46% sticking with their first loan offer, respectively. Older buyers are also more likely to do so: 72% of boomers and 59% of Gen Xers took their first offer, compared to just 38% of millennials.
Homeowners do seem to be learning their lessons after making a home purchase, as refinancers are savvier shoppers. Of the 45% of homebuyers who refinanced the mortgage on their current homes, 56% shopped around. It paid off: 81% indicated that they found a lower rate than the one offered by their current lenders.
Notably, having a prior relationship with a lending institution makes a difference when it comes to holding off on shopping around. Fifty-four percent of homebuyers say they got their current home loan from somewhere whose services they’re already availing of, like a checking account, credit card or auto loan. Men (58%) are more likely than woman (50%) to use a lender they’ve previously used, while millennials (65%) are more likely to do so than Gen Xers (50%) and baby boomers (39%).
