Has Anyone Learned? Borrowers Still Shop Longer for a Car Than a Home Loan
Two years ago, we fielded a survey on how much time borrowers spend researching home loans and compared it to time spent researching other types of investments and purchases. We were shocked then to learn that they typically spent five hours researching a home loan – less than they spent researching a car (eight hours), and the same amount of time they spent researching a vacation.
Since we fielded first that survey, the housing downturn picked up steam and hundreds of thousands of homeowners lost their homes to foreclosures, sometimes because of risky mortgages.
We decided to ask these questions again this month, and let’s just say we were more than a little surprised when we saw the results: The typical borrower again reported spending only five hours researching their home loan. One-third reported spending less than two hours! That compared to 10 hours of research for a car purchase, and five for a vacation. See below for the most recent results (full results in today’s press release).
For most Americans, a home is the most expensive purchase they’ll ever make. So that home loan is important. Shopping around can save a lot of money in the long run (even a half-point difference in a mortgage rate can save someone who buys a $300,000 home with 20% down more than $26,000 over the life of the loan).
But more than that, shopping around can help borrowers compare attributes of the loans themselves. How much will the monthly payment be, after all the fees and expenses are rolled in? What is the true cost of the loan over five, 10 or 15 years? Which loan fits in best with their plans?
The answers to these questions can be complicated and hard to pin down, which is why we try to make it easy for borrowers who use Zillow Mortgage Marketplace.
In addition to getting multiple quotes, without revealing their names, phone numbers or social security numbers, borrowers can compare and sort custom quotes based on criteria like the true cost of the loan, fees, monthly payment and lender ratings. Mortgage calculators and an informative mortgage blog written by professionals further help consumers navigate the often confusing process.
Did you shop around for a loan the last time you bought a home or refinanced? Do you wish you had?