Most borrowers do not shop around for mortgage offers, survey finds

The majority of homebuyers stick with the very first mortgage product offered, opting to not shop around with other lenders, a study conducted by an online financial services marketplace found.

Over 54% of borrowers with mortgages on a recent home only received one mortgage offer, a LendingTree survey published Monday said. In cutting their home buying journey short, borrowers may not be getting the best deal for themselves.

The survey, which gathered the opinions of over 2,000 participants in mid-April, concluded that 45% of homebuyers with a mortgage who shopped around got a lower offer than their first.

In breaking down the survey responses, only a mere 22% of borrowers got two offers and 17% got three or more offers.

Millennials in the group were more likely to comparison shop with 62% reporting doing so, while 28% of boomers in the questionnaire say they weighed different options. Meanwhile, a greater share of women (62% of the female respondents) said they are likely to accept the first offer without shopping around, compared to 46% of men.

Figuring out how much borrowers can actually save if they shop around is contingent on mortgage rates and loan size, but it can be a significant chunk of change, said Jacob Channel, senior chief economist at LendingTree, in a written statement Monday.

“That said, it’s not out of the realm of possibility for someone who received multiple offers and then picked the one with the lowest rate to save hundreds of dollars a month, thousands of dollars a year and tens, if not hundreds, of thousands of dollars over the lifetime of their loan,” he added in a press release.

Almost 30% of those surveyed said the top reason for not seeking multiple mortgage offers stemmed from confidence that they were receiving the best rate, followed by 20% saying they had a desire to use the lender recommended to them by their real estate agent.

Refinances, however, are a different story, with the survey finding that out of the 45% of homebuyers who’ve refinanced the mortgage on their current home, 56% shopped around.

A little over 80% of those who shopped around found a lower rate than their current lender offered, the report concluded

To no one’s surprise, a good chunk of the survey’s participants said mortgage rates have had an impact on when they decided to buy a home.

Over a third of buyers (35%) purchased a home earlier than planned to take advantage of low rates. Comparing genders, 43% of men were swayed to purchase a home due to lower rates versus 26% of women respondents. 

Meanwhile, about 57% of respondents say they met with a real estate agent before they met with a lender during their home buying process.