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Although mortgage rates keep setting new record lows in 2020, only six out of 10 homeowners who look into refinancing succeed. Whether they’re successful or not, the vast majority of homeowners who research rates inadvertently trigger unwanted sales pitches from mortgage lenders in the form of text messages, phone calls, emails, or letters.
Those are two of the key findings of a survey of 699 homeowners who have looked into refinancing their mortgage in 2020. The survey, conducted from Aug. 17-25, also found that:
Visiting a mortgage comparison site increased the odds of success
Among homeowners who succeeded in refinancing, 62.2% visited a mortgage comparison site, compared to 47.5% of those who did not refinance.
Homeowners who succeeded in refinancing were also more likely to visit individual lender websites, and to contact a mortgage broker or loan officer.
Those who did not succeed in refinancing were more likely to check with their existing lender compared to those who were able to refinance.
Obtaining personalized rates increased the odds of success
Some mortgage comparison sites provide rates in comparison tables that aren’t personalized for each borrower. Homeowners who succeeded in refinancing were more likely to have obtained personalized or prequalified rates by providing their credit score or authorizing a credit check.
Obtaining rates from multiple lenders increased the odds of success
Most homeowners didn’t bother to get rates from more than one or two lenders. But 28.4% of homeowners who succeeded in refinancing obtained rates from more than two lenders, while only 23.2% of homeowners who didn’t refinance did the same.
High rates or fees are the factors most likely to keep homeowners from refinancing
Among homeowners who decided not to refinance their mortgage only one in 10 said they were unable to find a lender who would approve them. Most said the reason that they decided not to move forward was that the interest rate or fees they were offered were too high. Many who gave other reasons said they had an application in process or were still researching their options.
Getting inaccurate loan information decreased the odds of success
Only one in three homeowners (33.8%) who succeeded in refinancing said they got inaccurate rates when researching their options. But 41% of homeowners who didn’t refinance said the rates they received were not accurate.
Researching mortgage rates often triggered unwanted sales pitches
Seven out of 10 homeowners (71.0%) said they received unwanted sales pitches after researching rates. These unwanted text messages, phone calls, emails and letters were even more common for those who succeeded in refinancing, with 78% saying they received such pitches.
Most found these sales pitches to be annoying, distracting or disruptive
Among those receiving sales pitches, 74% said they found them to be annoying, distracting or disruptive. Almost nine out of 10 homeowners (87.3%) who did not succeed in refinancing said they were bothered by the sales pitches.
Those who refinanced had a better experience researching rates
Homeowners who succeeded in refinancing their mortgages were more likely to say they were satisfied with their experience researching mortgage rates, with an average rating of 7 on a scale of 1 to 10. Those who did not refinance rated their experience researching rates at 5.7, on average.
How to get prequalified rates, not sales pitches
Homeowners who want to take advantage of lower mortgage rates can better the odds of refinancing, and protect themselves from unwanted sales pitches, by using the Credible mortgage marketplace to request prequalified rates from multiple lenders. Obtaining rates from multiple lenders can also save consumers thousands of dollars, according to an analysis by mortgage giant Freddie Mac.
When you use Credible to check rates, you won’t be contacted by lenders unless you choose to move forward with a lender and loan product. Other comparison sites treat consumers as “leads” to be sold or handed off to multiple lenders.
If you find an option you like, Credible streamlines the application process, minimizing the questions you need to answer and automating document uploads. Credible provides an end-to-end mortgage experience that lets you complete the entire origination process from rate comparison up to closing without leaving the site.
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About Credible
Credible is a multi-lender marketplace that empowers consumers to discover financial products that are the best fit for their unique circumstances. Credible’s integrations with leading lenders and credit bureaus allow consumers to quickly compare accurate, personalized loan options ― without putting their personal information at risk or affecting their credit score. The Credible marketplace provides an unrivaled customer experience, as reflected by over 3,700 positive Trustpilot reviews and a TrustScore of 4.7/5.
