Consumers could be leaving money on the table by failing to gather quotes from multiple lenders when shopping for a mortgage. In fact, borrowers stand to save an average of $1,500 over the life of a 30-year loan by just getting one additional rate quote when shopping for a mortgage. Multiple quotes could bring bigger savings, according to Freddie Mac’s April Insight report.
Eighty percent of borrowers who received one additional rate quote while shopping for a mortgage saved between $966 to $2,086 over the life of their loan. Borrowers who gathered five rate quotes saw an average savings of $2,914. Eighty percent of the borrowers who obtained five quotes saved between $2,089 and $3,904, according to Freddie Mac’s report.
Yet, nearly half of consumers fail to shop for better rates before taking out a mortgage to buy or refinance a home, according to Freddie Mac’s report.
“By shopping more than one mortgage lender, consumers are more likely to get a better interest rate and save money in both the short and long term,” says Len Kiefer, Freddie Mac’s deputy chief economist. “With lower monthly payments and lower fixed fees, the loan will be more affordable and thus safer, and consumers may have hundreds or thousands of dollars more in their pockets. Not a bad return for a few phone calls or clicks.”