SAN FRANCISCO–While mortgage rates keep setting new record lows in 2020, just six out of 10 homeowners who look into refinancing actually succeed.
And 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,” according to a new study from Credible.
Those are two of the key findings of a survey of 699 homeowners who have looked into refinancing their mortgage in 2020. According to Credible, the survey, conducted from Aug. 17-25, also found:
- Visiting a mortgage comparison site increased the odds of success
- Obtaining personalized rates increased the odds of success
- Obtaining rates from multiple lenders increased the odds of success
- High rates or fees are the factors homeowners were most likely to cite as barriers to refinancing
- Getting inaccurate loan information decreased the odds of success
- Researching mortgage rates often triggered unwanted sales pitches
- Most consumers reported that they found these sales pitches to be annoying, distracting or disruptive
- Those who successfully refinanced say they had a better experience researching rates than those who did not
Among homeowners who succeeded in refinancing, 62.2% visited a mortgage comparison site, compared to 47.5% of those who did not refinance, Credible reported.
“Homeowners who succeeded in refinancing were also more likely to visit individual lender websites, and to contact a mortgage broker or loan officer,” Credible said. “Those who did not succeed in refinancing were more likely to check with their existing lender compared to those who were able to refinance.”
The Findings
Among some of the other findings:
- 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.
- 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.
- 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, Credible said.
- 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.
- 71% 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.
- 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, according to Credible.
The full survey can be found here.