It pays to comparison shop - specifically when mortgage rates go over 7 percent.
According to a new study from government-backed mortgage group Freddie Mac, the typical mortgage rate savings quadruples for home buyers who get quotes from multiple lenders.
At face value, it's an obvious conclusion. As consumers, we comparison shop in other, non-mortgage parts of our lives and save a lot of money doing it.
However, with mortgages, buyers rarely comparison shop because, as consumers, we're told that mortgages are commodities and "rates all come from the same place anyway."
But that's not exactly true.
The Freddie Mac study covers a 12-year period from 2010-2022. It looked at millions of mortgage applications and found that, as mortgage rates rise, interest rate variance among lenders increases.
Said plainly: the higher mortgage rates go, the more money you save by talking to multiple lenders.
In a typical mortgage market, home buyers save about 0.125 on their mortgage rate just by getting a second quote. In today's market, with elevated rates, the savings double to about 0.25 percentage points.
Buyers who talk to 4 or more lenders save up to 0.50%, which is another doubling in benefit.
Read the complete study here, and when you're ready to see how much home you can afford at today's current mortgage rates, visit Homebuyer.com to get a comparison quote.
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