CFPB: Nearly 50% of Borrowers Don’t Shop for a Mortgage

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CFPBA report released earlier today from the Consumer Financial Protection Bureau (CFPB) shows nearly half of home loan borrowers don’t shop around when looking for a mortgage.

So… that begs the question, do you? Last year, when my boyfriend and I decided to take the plunge and buy a new home, we did a ton of research – from the term (15 or 30 years), type of loan (Federal Housing Administration (FHA), Veterans Affairs (VA), conventional loan), to the interest rate available to us at the time.

But, it appears we are not your “average bear”.

“Our study found that many consumers are not shopping for a mortgage. Consumers put great thought into the choice of a home, but the mortgage process continues to be intimidating,” said CFPB Director Richard Cordray.

Consider this: Women spend almost 400 hours a year shopping (food, clothes, etc.), according to a study from OnePoll.com. Imagine all the things you could find if you only spent a few hours a day shopping for your mortgage!

The biggest shopping spree of our young lives (AKA: Our mortgage) started with a trip to Quizzle. It was there, in the Big Picture, we could run our numbers and understand what types of loan programs and rates we could expect.

The CFPB’s new Rate Checker tool is pretty awesome too. You can plug in different scenarios and see the outcome of each one, such as the effect of a higher credit score or a bigger down payment. And, it even tells you current interest rates in the state you are looking to buy. Pretty nifty.

*You will need to know your most recent credit score to best use this tool. Head to Quizzle.com to get your free credit score and report before using Rate Checker.

Using Quizzle.com and the CFPB’s Rate Checker tool helps demystify the mortgage process and empowers you with the education and confidence to make the best decision for you and your situation.

The side effects of the “wrong mortgage” are real, and can result in some severe money losses. Picture this: You worked your tail off to save money for something big, like a trip or new car, and then you just throw it away – literally. I’m talking off a cliff, into a river, down the drain – bye-bye.

If you don’t like my example, the CFPB has a better one:
For a borrower taking out a 30-year fixed-rate loan for $200,000, getting an interest rate of 4 percent instead of 4.5 percent translates into approximately $60 in savings per month. Over the first five years, the borrower would save about $3,500 in mortgage payments. Also, the lower interest rate means that the borrower would pay off an extra $1,400 in principal in the first five years, even while making lower payments.

So whether you’re buying a new home or refinancing your existing one, I encourage you to shop around and do your research, after all it’s one of the most important financial moves you will ever make. Education is the most powerful thing you can have while shopping for a mortgage – make the most of all the tools, information and options available to you.

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Krystal lives, works, and plays in the Detroit area and loves covering a variety of personal finance topics for the Quizzle Wire.