CHARLOTTE, N.C., Dec. 14, 2010 /PRNewswire/ -- Consumers today are expert comparison shoppers, always on the hunt for the best deal, but when it comes to their mortgage, borrowers often lock in their first home loan offer. According to a new LendingTree survey of 1,317 homeowners conducted online by Harris Interactive in September, 96 percent of American consumers compare prices when shopping for anything, but nearly 40 percent obtain just one home loan quote. By comparison, when shopping for a home computer, consumers research an average of 3.1 models before making a purchase. This explains why fewer than 3 in 10 (28 percent) borrowers are very confident they received the best possible deal on their current mortgage.
Based on a nationally representative sample of current homeowners who were involved in shopping for their home loan, the study revealed 85 percent of consumers use the web to comparison shop, yet just more than 1 in 5 (21 percent) shopped online first for mortgage rates. Additionally, although nearly 40 percent obtain just one home loan quote, more than 9 in 10 borrowers (91 percent) understand interest rates vary between lenders.
"Choosing a mortgage is probably the most important financial decision most of us will ever make, yet many consumers simply take the first offer that comes their way," said Doug Lebda, Chairman and CEO of LendingTree. "It's a gamble that leaves many borrowers uncertain they've received the best deal on their mortgage. Our research clearly shows that home buyers and homeowners need help navigating the often complex world of home loan financing. LendingTree strives to simplify the process and instill confidence by offering services like our Best Deal Guarantee, lender ratings and reviews, and the opportunity to compare multiple offers. At the end of the day, 30 years is too long to be in the wrong loan."
Frustration also appears to be at the root of this shopping dilemma. According to the survey, 70 percent of borrowers find shopping for a mortgage frustrating, citing the complexity of the terms (21 percent) and time-intensiveness nature of the process (20 percent).
The survey also reveals:
- Though it is a decision that will affect them for the next 15 – 30 years, nearly three-quarters (72 percent) of homeowners spent the equivalent of a full working day or less shopping for their home loan. Even more shocking? One in ten spent the amount of time it takes to brush their teeth.
- Twenty-three percent of homeowners recognize they could save more than $100 a month by reducing their mortgage rate by one percent. According to LendingTree data, consumers can save about $208 per month, by reducing their rate from 5.5 percent to 4.5 percent on a $250,000 loan.
- Women are more than twice as likely as men to say they were not at all involved with shopping for their mortgage or when refinancing (16 percent versus seven percent, respectively).
"By bringing competition to the market, LendingTree gives consumers power over the process. Our goal is to ensure each and every borrower is confident they've received the best possible deal on their mortgage," said Lebda.
Designed to empower consumers by bringing choice and competition to the home loan shopping process, LendingTree helps borrowers navigate the path to owning and refinancing a home by providing multiple loan offers within minutes, all via one simple form. The site offers a variety of tools to ease borrower frustration and instill confidence in the process, including the innovative Look Before You Lock. In just a few quick steps, Look Before You Lock helps homebuyers determine if their current loan offer is a good deal by comparing it to offers received by similar LendingTree customers.
This survey was conducted online within the United States by Harris Interactive on behalf of LendingTree from September 28-30, 2010 among 1,317 homeowners ages 18 and older, of which 659 adults were at least somewhat involved with obtaining their current mortgage. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables, please contact Beth Ciampa at 617-226-9950.
About LendingTree, LLC
LendingTree, LLC is the nation's leading online lender exchange and personal finance resource, helping consumers take charge of all their financial decisions, from budgeting to money management to mortgages to credit cards and more. LendingTree provides a marketplace that connects consumers with multiple lenders that compete for their business, as well as an array of online tools to aid consumers in their financial decisions. Since inception, LendingTree has facilitated more than 28 million loan requests and $214 billion in closed loan transactions. LendingTree provides access to lenders offering mortgages and refinance loans, home equity loans/lines of credit, and more. LendingTree, LLC is a subsidiary of Tree.com, Inc. (Nasdaq: TREE). For more information go to www.lendingtree.com, dial 800-555-TREE , join our Facebook page and/or follow us on Twitter @LendingTree.
About Harris Interactive
Harris Interactive is one of the world's leading custom market research firms, leveraging research, technology, and business acumen to transform relevant insight into actionable foresight. Known widely for the Harris Poll and for pioneering innovative research methodologies, Harris offers expertise in a wide range of industries including healthcare, technology, public affairs, energy, telecommunications, financial services, insurance, media, retail, restaurant, and consumer package goods. Serving clients in over 215 countries and territories through our North American, European, and Asian offices and a network of independent market research firms, Harris specializes in delivering research solutions that help us – and our clients – stay ahead of what's next. For more information, please visit www.harrisinteractive.com.
Bethany Ciampa, Mullen