Borrowers Continue to Spend Minimal Time Researching Home Loans

Despite the wide-spread impact the mortgage meltdown has had on the U.S. economy, today's borrowers continue to spend very little time researching their home loan, a recent ""Zillow"":http://www.zillow.com/ survey found.

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The survey of 2,729 adults, conducted on Zillow's behalf by ""Harris Interactive"":http://www.harrisinteractive.com/, found that borrowers are spending no more time researching a home loan today than they did in 2008. And those who obtained a loan in the past five years are soliciting an average of just three quotes, down from an average of four quotes in 2008.

According to the survey, borrowers who obtained a home loan in the past five years typically spent just five hours researching their options, equal to the amount of time researching a vacation but just half the time spent researching a car purchase. In addition, nearly one third of borrowers â€" 31 percent â€" spent two hours or less researching their home loan, the same amount of time devoted to researching a television.

The survey found that the average home loan costs five times more than the average car and 80 times more than the average vacation, insinuating that the magnitude of a home loan investment has little influence on borrowers’ researching behaviors.

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""The last few years should have driven home the lesson that understanding one's home loan is critically important, but mortgages continue to be something that most people don't want to spend time thinking about,"" said Dr. Stan Humphries, Zillow chief economist. ""Not understanding a home loan can have catastrophic consequences.""

Humphries said he is surprised that people spend more time shopping for cars and televisions than they do researching mortgages, and he's further shocked that borrowers spend no more time shopping for mortgages now than they did two years ago, even in the midst of a foreclosure crisis. He said people spend countless hours shopping for their home, yet few realize that small differences in the interest rate or discount points can add tens of thousands of dollars to the overall cost a home.

In fact, the survey found that borrowers who shop around and get a number of mortgage quotes can save thousands of dollars over the life of the loan. According to Zillow, even half a percentage point in a loan rate can save the buyer of a $300,000 home more than $26,000, and on a $500,000 home, the savings can be more than $44,000.

Some borrowers have learned their lesson, though. In the past five years, 16 percent of U.S. adults reported that they have obtained or refinanced a home loan, and 65 first of those admit that they want to do things differently when shopping for their next home loan.

Of these, 58 percent would like to compare terms for loans on an apples-to-apples basis, 56 percent would like fees standardized and easier to understand, 52 percent would like it to be easier to shop around for rates, and 50 percent would like to get more than one quote without sharing personal information.