Most homebuyers don't shop around for a mortgage, research shows. Why that's a bad idea
Because interest rates and closing costs vary among lenders, not shopping around for the best mortgage terms can be a costly mistake.
TL;DR
- 69% of homebuyers submit only one mortgage application.
- Shopping around for a mortgage can result in significant savings, potentially a full percentage point difference in rates and dramatic variations in closing costs.
- A 0.5% difference in interest rates on a $360,000 mortgage can save over $41,000 in interest over 30 years.
- Closing costs include items like title insurance, property taxes, lender fees, and points.
- Paying points (1% of the sale price) can sometimes result in a lower mortgage rate.
- Multiple mortgage applications submitted within a close timeframe (typically 14-45 days) are often counted as a single inquiry by credit-scoring models.