Nobel Prize recipient, Richard Thaler, in his research into seemingly irrational economic behaviors, "found that consumers generally search too little, get confused while evaluating complex alternatives, and are slow to switch from past choices, even if it costs them." "Why are consumers leaving money on the table?"
Based on this behavior, a borrower securing a mortgage might depend on their existing banking relationship or a single referral from a friend or agent rather than shopping multiple lenders.
When shopping for a lower mortgage rate, consider that not all lenders share the same business practices. Some may lure unsuspecting borrowers to a rate, knowing full well that they cannot deliver on it. After making a loan application and supplying information necessary for approval, they reveal that the rate is not available for "whatever" reason.
They're counting on the borrower wanting to get into the home because the closing date is near and they'll compromise by accepting the higher than quoted rate.
Shopping for a mortgage rate can result in savings because rates are set by individual lenders. To get an apples-to-apples comparison, the terms of the mortgage being shopped should be consistent among the lender candidates.
Consumers can make additional savings by not only shopping for better rates but for better terms and fees, which can vary widely among lenders.
The amount of savings can be affected not only by the difference in rates, but the size of the mortgage and the length of time borrowers expect to keep it without refinancing or selling.
Ask your real estate professional for recommendations of several trusted lenders for you to shop a rate, terms, and fees.
Stay up to date on the latest real estate trends.
Bob Webster | February 20, 2024
Bob Webster | February 16, 2024
Bob Webster | February 15, 2024
Bob Webster | February 12, 2024
Bob Webster | February 8, 2024
Bob Webster | February 7, 2024
Bob Webster | January 30, 2024
Bob Webster | January 23, 2024
Bob Webster | January 15, 2024
Bob is dedicated to offering the finest real estate service available in the Lake Geneva area. He attempts to make each buyer or seller he works with feel like they are the one and only client he has and strives to make each transaction a pleasurable experience with the least amount of problems, stress, and inconvenience to them.