More borrowers could be able to snag a lower mortgage rate — and save lots more money on their mortgage costs — if they would shop around, according to recent data from Fannie Mae’s November National Housing Survey. By not shopping around for a mortgage, borrowers often end up paying $1,000 or more in closing costs and may not get the lowest mortgage rate that could unlock savings for the life of the loan, according to the survey.
The survey showed that nearly half of lower-income mortgage borrowers only obtained one quote when signing up for their current mortgage.
Meanwhile, about 75 percent of higher-income borrowers received competitive offers in shopping around for a mortgage.
“Although a home purchase is the largest financial obligation most people will ever make, many borrowers do not fully understand their mortgage products and costs,” says Doug Duncan, Fannie Mae’s chief economist. “As a result, some home owners in this position may find themselves with unsustainable payments down the road.”
Source: “Fannie Mae: Failure to Mortgage Shop Costs Borrowers,” HousingWire (Nov. 27, 2012)