Consumers are used to comparing flights and hotel prices and sifting through thousands of product reviews to make sure they get the best deal, and yet when it comes to the biggest financial purchase they will ever make, buying a home, they choose to go with the first lender they find.
Chris Meyer, co-founder at Magilla Loans, an online loan comparison site, explained in an interview that home shoppers tend to be so beat down by the time they get to the mortgage part that they just want to get it done quickly. So to save time, they cut out the search process for the best home loan.
The Consumer Financial Protection Bureau previously cited that almost half of borrowers seriously consider only a single lender or broker before deciding where to apply.
And 77% of borrowers only end up applying with a single lender or broker.
That’s a low number for an extremely big decision.
Meyer stressed that the most salient thing people should do is shop for the loan before they buy the house.
“You should gauge the marketplace on your own. If your broker does have the best deal, then sure, go with him,” said Meyer.
“It’s the largest investment of your life,” said Meyer. “Why wouldn’t you take the time?”
Meyer noted that Magilla data indicates that five to seven options will give loan shoppers a very accurate range of what it is in the country
However, he said people choose not to do this because they think it takes too much time or that they have to give their private information to all of these people.
“People want it done fast,” said Meyer. “People need to step back and understand you don’t buy a house everyday. You need to take the time and find the best rate for your biggest investment.”