First-time buyers are shopping around for mortgages
Many first-time buyers struggled with student loan and credit card debt before making the plunge to purchase a property.
And once they chose their dream first home, first-time buyers are considered to be financially savvy. According to a recent LendingTree survey, 52% of first-time buyers looked at more than one mortgage lender before committing, compared to 48% of repeat buyers. After comparison shopping, 70% of first-time buyers applied to one mortgage lender, while 23% applied to two and 5% applied to three.
For those who applied to more than one lender, it was for a few reasons. Nearly a quarter of first-time buyers said they were searching for better loan terms, compared to 16% of repeat buyers. Eleven percent of first-time buyers were concerned about qualifying for a loan, compared to 6% of repeat buyers and 10% of first-time buyers did so because of the Good Faith Estimate information, compared to 6% of repeat buyers. Still, 7% of first-time buyers and 4% of repeat buyers applied to more lenders due to being turned down on an application previously.
Before applying, only 19% of first-time buyers said they were familiar with the process of taking out a mortgage, while only 24% knew the different type of mortgages available and 33% knew the current mortgage rates. However, the majority (65%) of first-time buyers did know their credit history or score and more than one-third knew the income needed to qualify for a mortgage. Comparatively, more than half of all repeat buyers were familiar with all of this information.