Survey finds Homebuyers not shopping for best mortgage rates and terms

Paying the Bills - BSN

(Best Syndication News) - A study conducted by the Federal National Mortgage Association (OTC:FNMA) found that many homebuyers in the United States do not shop around enough to save money on their mortgage. The November 2012 National Housing Survey Topic Analysis Report found that consumers could save money and get a more financially stable mortgage if they shopped more carefully.

Fannie Mae Chief Economist Doug Duncan said buyers often do not completely understand the details and the costs involved. Some homebuyers may even be surprised to find that their budgets were unrealistic when they couldn’t afford the payments later on.

Fannie Mae conducted the study to learn more about homebuyer trends. The secondary lender wanted to understand how home loans were acquired by different demographic groups and people at different income levels. The survey found that most homebuyers would shop around for a mortgage, however almost half of all lower-income borrowers got just one quote. Other research found that getting only one quote can cost the borrower $1,000 or more in closing costs.

Higher income homebuyers were influenced more by a competitive loan offer than the lower income homebuyers. All respondents in all groups were not comfortable getting quotes using their mobile device; however those surveyed with a high income were more likely to use mobile devices and research mortgage loans online during the shopping process.

The survey also found that a considerable number of those surveyed did not understand the mortgage elements. One question required the respondent to estimate the maximum percentage in an adjustable-rate mortgage (ARM) payment over the life of a loan; 41 percent were not able to answer the question.

By: Dave Reddy

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