Lower income borrowers are still not shopping effectively for their mortgage loans, an analysis by Fannie Mae of its 2013 National Housing Survey finds.
These results are similar to findings of a 2012 study by the government-sponsored enterprise.
There are opportunities to create online tools to improve the ability of all borrowers to shop for a mortgage, adds Steve Deggendorf, director of business strategy at Economic & Strategic Research.
Lower income borrowers want loan terms and costs that are easier to understand to help them make comparisons. As the 2012 survey found, this group relies on advice from others, such as a real estate agent, mortgage professional, friends and/or family, to choose a lender and/or determine how much to borrow.
Higher income borrowers are more likely to choose a lender based on the offer. They also make their own calculations to figure out how much to borrow.
Increasing the amount of loan shopping is one of the goals the Consumer Financial Protection Bureau has for the recently proposed new disclosure to replace the good-faith estimate.
Plus this group uses online shopping approaches about twice as frequently as lower income borrowers.
However, all income groups are looking to shop for their mortgage on the Internet more than they currently do. This indicates that online technology will likely play an increasingly larger role for all borrowers in the shopping process and presents opportunities for shopping enhancements from originators, Deggendorf says in a Fannie Mae commentary.
On the other hand, the survey found consumers claiming they will use personal computers significantly more than mobile technology to shop for their mortgage and manage their personal finances. Social media plays a small role in mortgage shopping now and is likely to play a small role in the future, according to the survey results.