Why Don't More People Shop For Mortgages Online?

Why Don't More People Shop For Mortgages Online

?

To me, one of the greatest things about that advent of the internet is that it offers a whole new model for shopping. If you want something, you no longer have to go someplace to buy it, you can find virtually anything you want sold online. In addition to the ease of purchasing items, it has become a whole lot easier to compare prices between stores and to get product information. This proliferation of options and information make shopping easier than ever before.

It would be common sense that this new model of shopping would also apply to financial products, such as mortgages. However, a new study from LendingTree.com (via this article on Thestreet.com) shows that this is not the case. According to the study, almost 40 percent of homeowners only got one quote before choosing a mortgage. This is despite the fact that 9 out of 10 borrowers realize different lenders offer different rates and products. The same article says that 96 percent of consumers comparison shop for the best price when making a other purchases. It is certainly counter-intuitive that many people wouldn't shop around for what is likely to be the largest purchase of their lifetime.

The study cites the complexity of mortgages as the main reason people don't shop around more. Many people appear to be intimidated by the mortgage process, and 70% of people deemed the process to be frustrating. This probably stems from the fact that we are a fairly math-phobic society, and anecdotal evidence tells me that many people simply stop paying attention when confronted with a lot of numbers. Further, mortgage shopping often involves pre-approvals and can take a lot of time. The study found that 85 percent of people use the internet to shop for general purchases, but a shockingly low 21 percent look online for mortgage rates.

If you are reading this, you likely fall into the 21 percent who are looking for rates online. Despite that, I am curious to know why you think more people don't look online for mortgages and mortgage rates. Is it due to the complexity of the product? Is it because people traditionally shopped for mortgages in person at the bank? Is it aversion to math? Let me know in the comments section below.

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