Millions of Americans have refinanced their mortgages as rates have dipped to new lows.
However, mortgage lenders say: If home owners had shopped around more, they probably could have snagged an even lower rate and more savings.
Many borrowers settle on the first rate they're quoted, lenders say. LendingTree says that rates can vary by more than a percentage point for a borrower looking for a 30-year fixed loan.
Mortgage Daily illustrates the loss to the customer in the following example: "A consumer with a credit score of 759 and a loan amount of $260,000 might have received quotes from lenders in early August ranging from 3.25 percent to 4.625 percent. By choosing the lowest rate, the borrower would save $214 a month, $2,568 a year, and nearly $74,000 over the life of the loan."
Fewer than half of home owners say they shopped around when refinancing their loan, according to a survey by Harris Interactive of more than 1,000 home owners. On the other hand, 9 in ten American adults say they compare prices when shopping for major purchases.
"Consumers need to be engaged," says Doug Lebda, chief executive of LendingTree. "A lot of them are just happy to have it over with rather than hang in there to get the best deal."
Source: "Mortgage Shoppers Sell Themselves Short," Mortgage Daily (Sept. 10, 2012)
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