Newbie home buyers are more likely to shop around for a better mortgage loan term than repeat buyers, a new study from LendingTree shows. Studies have shown that shopping around for a mortgage can be a smart move, too: Home buyers could see a median lifetime savings of $40,959 in interest on a $300,000 loan by comparison shopping.
LendingTree researchers recently compared first-time buyers with repeat mortgage borrowers to see who is the more savvy shopper.
First-time buyers may be new to the real estate world, but they are entering the loan process prepared, the study confirmed. Fifty-two percent of first-time buyers consider more than one lender when choosing a mortgage, slightly more than 48 percent of repeat borrowers who do the same. Further, 29 percent of first-time buyers apply for a mortgage with more than one lender compared to just 20 percent of repeat buyers.
Researchers also note that first-time buyers may be more likely to shop around because they are concerned about qualifying for a loan. Only 24 percent of home buyers said they were very familiar with the different types of mortgages available, compared with 52 percent of repeat borrowers who said they were. Not surprising, first-time buyers also were less familiar with all aspects of the mortgage process, given it’s the first time they’re going through it.
Source: “First-Time Homebuyers Are Surprisingly Savvy Mortgage Borrowers,” LendingTree (April 24, 2019)
