The Consumer Financial Protection Bureau is a relatively new Independent Agency of the United States government which concentrates on… well… consumer financial protection. One of the things they have done since their inception is release reports on cunsumer behavior. In one of those recent reports they announced something pretty astonishing: just around half of all mortgage borrowers don’t bother to shop around for a mortgage lender.
How Can That Be?
Pretty astonishing. I mean, folks certainly look at more than one house before buying… usually (more than 50% of folks, I’d guess). But straight from the report (PDF warning):
Almost half of consumers who take out a mortgage for home purchase fail to shop prior to application; that is, they seriously consider only a single lender or mortgage broker before choosing where to apply.
The primary source of information relied on by mortgage borrowers is their lender or broker, followed by a real estate agent. Fewer consumers obtain information from outside sources, such as websites, financial and housing counselors, or personal acquaintances (such as friends, relatives, or coworkers).
You’ve Got to Shop Around!
Okay, that last part is alien to me – from 2009-2011 a select group of my coworkers and myself basically held court, and we all ended up buying (some of us more than once), refinancing, improving or otherwise getting very involved with real estate – and we all shared with each other. We also definitely double checked everything we did online – “Trust but verify” and all that.
And yes, personally, I’ve known exactly what the prevailing rates were (and the cost and breakeven of points) before I applied for every mortgage I’ve ever applied for.
So, let’s kick it back to basics for one piece: you need to shop around. Especially when it comes to something as expensive as a house.