If you are like most people, you spend time shopping around before you buy new appliances, a new car or even a new pair of shoes. When it comes to something as financially significant as your home mortgage, you understandably want to get the best rate possible. However, the majority of mortgage applicants make their lender selection based on factors other than the lowest interest rate.
A recent study revealed that one of the most significant reasons why an applicant chooses a specific lender is a referral. This may be a referral from a real estate agent, a home builder or someone else. In fact, for purchase loans, up to 53 percent of homebuyers take the word of their real estate agent when selecting a lender. Up to 19 percent of buyers choose a lender or loan officer because of an established relationship. As many as 17 percent of buyers make their decision based on a referral from a friend or a family member. In the case of refinances, 56 percent of applicants apply through the lender that holds the original loan, and 15 percent of borrowers made their lender selection based on a referral from friends or family members.
Mortgage loan amounts are sizable, and yours may easily be the largest debt that you are responsible for. With this in mind, even an eighth-percent or a quarter-percent on your interest rate can equate to tens of thousands of dollars or more in interest charges over the life of the loan. While the difference in the interest rate may seem negligible on the surface, it can equate to a large sum of money. With this in mind, it pays to shop around for the lowest rate on your next mortgage.
Are you ready to get familiar with your loan options? Reach out to our lending team at MortgageDepot to learn about today’s interest rates.
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