Buyers financing their home purchase can save hundreds of dollars in their first year of owning just by shopping around for a mortgage, according to new study from NerdWallet, a personal finance website.
Home shoppers who compare interest rates between five different lenders can pocket $430 in savings in their first year alone, according to NerdWallet’s analysis using a 30-year fixed-rate, $260,000 mortgage.
“That savings would accumulate and compound for every year that they had the loan,” Holden Lewis, a home expert at NerdWallet, told CNBC.
However, most borrowers fail to shop around. Indeed, half of home buyers say they only looked at one lender when buying a home, according to the survey of about 2,000 adults.
Lewis says borrowers are missing out on potential savings. He suggests borrowers not only call multiple lenders when looking for the best loan but also use online home affordability calculators to help better understand how their salary and monthly debt payments will affect their mortgage. He also urges buyers to factor in how much they’ll pay for taxes, insurance, maintenance, and repairs in their home purchase.
If you haven’t experienced it before, the home loan process can feel overwhelming, but our agents will help you stay informed throughout the process, from pre-approval to closing. The first thing to do is consult with a mortgage specialist (or two). If you don’t already have someone in mind, we partner with some of the best lenders in the industry, and we’d be happy to introduce you, so you’ll be taken care of.