Skip to main content
Press Release

Mortgage Borrowers May Be Leaving Money on the Table

November 27, 2012

Ineffective Mortgage Shopping May Result in Higher Costs and Greater Risk

Pete Bakel


WASHINGTON, DC – A new study from Fannie Mae finds that many Americans do not adequately investigate or fail to understand fully the choices available to them when shopping for a mortgage. This behavior may increase both cost to the borrower and the potential for problems to arise during the life of the loan. Data from the November National Housing Survey Topic Analysis Report suggest that consumers could save money and find a more financially sustainable mortgage product if they shopped more effectively.

“Homeowners who don’t obtain multiple mortgage offers or carefully compare rates are essentially leaving money on the table, particularly given today’s unprecedentedly low interest rates,” said Fannie Mae Chief Economist Doug Duncan. “Although a home purchase is the largest financial obligation most people will ever make, many borrowers do not fully understand their mortgage products and costs. As a result, some homeowners in this position may find themselves with unsustainable payments down the road.”

To better understand homebuyer trends, the study examines how consumers across different demographic groups, including various income levels, undertake the mortgage shopping process. While most consumers do undertake some form of shopping around for their mortgage, data indicate that nearly half of all lower income mortgage borrowers say they obtained only one quote when shopping for their current mortgage. Recent research indicates that this practice may cost borrowers $1,000 or more in closing costs.

According to National Housing Survey data, when choosing a mortgage lender, more than 3 out of 4 higher income respondents said that competitive offers would have a major influence on their choice, which is more than 20 percentage points higher than lower income respondents. Data also show that higher income respondents are more comfortable using technology such as mobile devices and online research in the mortgage shopping process. However, across all income groups, consumers are less comfortable obtaining mortgage quotes or the mortgage itself using a mobile device. Survey results also find that a substantial portion of all consumers do not understand key mortgage elements. When asked to estimate the maximum percentage by which the monthly adjustable-rate mortgage (ARM) payment can increase over the life of the loan, 41 percent of respondents were unable to answer.

For more detailed findings from the November National Housing Survey Topic Analysis Report, click here.

Fannie Mae's Topic Analysis Reports provide deeper insights into one or more housing issues based on the compilation of three monthly National Housing Survey samples. The National Housing Survey polls more than 1,000 homeowners and renters each month to assess their attitudes toward owning and renting a home, the current state of their household finances, views on the U.S. housing finance system, and overall confidence in the economy. The three monthly survey studies that make up any given Topic Analysis Report are identical in wording and placement of questions.


Opinions, analyses, estimates, forecasts, and other views of Fannie Mae's Economic & Strategic Research (ESR) Group included in these materials should not be construed as indicating Fannie Mae's business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the ESR Group bases its opinions, analyses, estimates, forecasts, and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current, or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts, and other views published by the ESR Group represent the views of that group as of the date indicated and do not necessarily represent the views of Fannie Mae or its management.

Fannie Mae is a leading provider of mortgage credit in the United States. We guarantee and purchase loans so that families can buy homes, refinance their existing mortgages, or access affordable rental housing. Fannie Mae is focused on assisting homeowners in distress, stabilizing neighborhoods, and encouraging sustainable lending. We are committed to improving our financial condition and our priorities are aligned with the public interest. Our work supports the housing recovery today and is helping to build a better housing finance system for the future.

Follow us on Twitter: