More than half of homebuyers don’t shop for a mortgage: LendingTree

Despite the potential for savings, more than half of all U.S. homebuyers (54%) who took out a mortgage for their most recent home purchase received only one loan offer. This indicates that a sizable portion of borrowers do not shop around for the best mortgage deal, according to new survey results from LendingTree.

Twenty-two percent of survey respondents received two offers, while 17% received three or more offers. At a generational level, baby boomers were the least likely cohort to comparison shop. Only 28% of boomer respondents shopped around, compared to 62% of millennials, the results found.

LendingTree commissioned survey company QuestionPro to conduct the online survey, consisting of 2,001 U.S.-based adults between the ages of 18 and 78. The survey was conducted from April 15-17 “using a nonprobability-based sample, and quotas were used to ensure the sample base represented the overall population,” the results explained.

For the purposes of the survey, baby boomers were defined as respondents between the ages of 60 and 78; Generation X between 44 and 59; millennials between 28 and 43; and Generation Z between 18 and 27.

“Homebuyers are likely leaving money on the table when not shopping around,” LendingTree stated. “Among those who compared more than one mortgage offer, 45% say the lowest offer didn’t come from their first lender. Going further, 46% of those who got a mortgage say they went with a lender they didn’t have a prior relationship with.”

Among people who elected not to comparison shop, 28% attributed the reason to being confident they got the best rate they could, while 20% said they wanted to use a lender that had a preexisting relationship with their real estate agent. Another 14% said they rushed the financing process to close a deal due to the competitive nature of the current housing market.

The survey also found that mortgage rates influence homebuyer timelines. More than one in three respondents (35%) said they purchased a home sooner than they planned so they could take advantage of lower mortgage rates.

“The exact amount that a borrower can save by shopping around for a mortgage will vary based on factors such as the rates they’re offered and the size of their loan,” said Jacob Channel, LendingTree’s senior economist and author of the survey report.

“That said, it’s not out of the realm of possibility for someone who received multiple offers and then picked the one with the lowest rate to save hundreds of dollars a month, thousands of dollars a year and tens, if not hundreds, of thousands of dollars over the lifetime of their loan,” he added.