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Why it’s important to shop around for a mortgage

We always advise you to shop around for the best value, no matter the purchase. Buying a car? Shop around. Looking to change health insurance? Shop around. Need a plumber? Shop around. Shop around. Shop around. Investigating all options before making a purchase provides you with the greatest chance at savings. Yet you’d be surprised how many people ignore this guideline when buying a home.

A recent study from Fannie Mae found that more than a third of first-time home buyers in 2018 took out a mortgage after receiving just one quote. Repeat 2018 home buyers were even worse: 41 percent of them said they received only a single quote. Interestingly, 76 percent of all home buyers who didn’t shop around for a mortgage said they “did not have regrets” according to the report. That’s too bad, because by failing to shop around, they left money on the table.

According to Marketwatch, home buyers who received five or more mortgage quotes saw a spread of $2,045 between the highest and lowest options. That’s a lot of money to brush away simply because you don’t feel like shopping around. The Fannie Mae study also found that mortgage buyers who received just more than one quote were able to negotiate lower interest rates and associated fees.

Instead of picking the first mortgage quote you’re presented, consider this report and shop around. Search online for the best rates — consider credit unions, mortgage lenders and more. However, keep in mind that those online quotes are just estimates. The professional lender will provide you with a clear price quote after they consider all of your information. Once you have a few quotes, pick the one that provides the best value to you. You can use those multiple quotes as leverage to score the best deal possible.

Chris O'Shea

Chris O'Shea