Report: Homebuyers Fail to Put Due Diligence into Researching Lenders

Publishing the results of a new survey, Zillow Home Loans discovered that prospective buyers spent about as much time researching a new television or vehicle purchase than they did shopping around for mortgage lenders. 

Overall, the survey found 72% of prospective buyers only plan to get one quote for a mortgage and further found these respondents may be on the hook for that decision to the tune of hundreds of dollars in additional costs per month. 

Among reasons for this are worries that multiple credit pulls may bring down their credit score (30%), they were happy with the first lender/offer they received (24%), the time and effort of shopping around (19%), the misconception that all lenders offer the same rate (15%), and the lack of willingness to share their financial information with lenders (14%). 

This is in comparison to 28% of those same respondents indicating that they spent at least a month researching a new vehicle and 23% spent a month researching an upcoming vacation, but only 13% said they spent that much time researching mortgage lenders before submitting an application. 

Zillow research finds prospective home buyers who don't shop around could end up spending tens of thousands of dollars more over the life of their mortgage. This is most like caused by a lack of understanding about mortgage applications process which drives people to skip the research. 

"Home buyers should take the time necessary to make an educated decision on their mortgage. It's often the largest financial decision someone makes. Taking time to understand their credit report, repair any issues and consult with a qualified mortgage professional can make a significant difference in a home shopper's experience," said Libby Cooper, VP of Zillow Home Loans. "Buyers often don't understand that a loan officer can be a partner in the home-buying process. They help discuss options and find the right fit for a customer's personal financial situation. Zillow Home Loans can help home buyers educate themselves and head into their home purchase feeling more confident in this significant financial decision."