For St. Cloud home shoppers who anticipate taking advantage of today’s low mortgage interest rates, the Consumer Financial Protection Bureau has a few words of interest. The CFPB thinks it has found a way for consumers to get the best home loan deals.

The way they recommend is to shop around.

Now, it may seem as if everybody in St. Cloud would know that without needing the Consumer Financial Protection Bureau to clue them in, but the CFPB has evidence to the contrary. The last time they looked, nearly half of mortgage borrowers hadn’t shopped around before they signed up for their loan (47% of them, to be precise). That is rather surprising, since even an eighth of a percentage point difference in the interest rate works out to a lot more than spare change. Why more home buyers don’t compare mortgage deals may be due to a number of factors.

For one thing, anyone who has spent much time on the internet has had the unfortunate experience of being promised that they can “see today’s rate” with no strings attached, only to eventually discover (after entering a lot more information than seems relevant) that they will be contacted (phone number, please) by what is likely to be a high pressure salesman. You get the feeling that you may have shared too much information to web denizens you don’t really know.

Another reason might be concern about qualifying. If you’ve had credit rejections in the past, the good news that comes with receiving any offer might make some folks accept it out of sheer relief. 

Yet another reason might be especially true in today’s St. Cloud market. Especially if you have earlier familiarity with the much higher rates from previous eras, the first mortgage rate you hear may be so low that you are delighted to accept it. There is also the fact that if you are offered several options with different loan types, terms, and point-rate tradeoffs, the act of choosing between them can satisfy the natural inclination to shop around.

The CFPB would like to encourage more aggressive consumerist behavior. To accomplish that—to make everyone “feel comfortable shopping in the mortgage market”—their web site has various educational tools. Their staff produced a number of charts. The one that shows interest rates from 1990 to 2014 slopes delightfully downward. Less informative is another chart that shows how borrowers who feel “confidence in their knowledge of available interest rates” are almost twice as likely to shop around as those who say they are “unfamiliar with available interest rates.” That doesn’t seem to be much of a revelation—it’s like saying that learning to read price tags increases your ability to comparison shop…

For those who do expend the effort to do mortgage comparisons, there is also agreement that having a professional in your corner leads to the most satisfactory results. It’s another good reason why, on the way to acquiring your St. Cloud dream home, giving me a call is an excellent idea!