Is it discrimination? Income disparities? Why do women tend to pay higher rates?
The study suggests that the primary reason is because women tend to rely on the recommendations of friends when they shop for mortgages, while men search for the lowest rate. Looks like this is one case where relying on a recommendation could cost you some serious money.
When facing a major purchase like a mortgage, recommendations from people you trust is a key step in the process, but women are often not ‘shopping’ enough women it comes to mortgage rates.
“It’s not surprising, because mortgage shopping can be incredibly complex, so we look to people we can trust to help make the decision,” says Daily Finance columnist, Laura Rowley. “But this is one area where you don’t want to get by with a little help from your friends.”
Instead, she advises, call two mortgage brokers and a direct lender, preferably a local small or midsize bank, and try the following script: “Hi, my name is (X) and I’m in the market to buy a ($X) house, and I’m going to put down (X) percent.
“I’m getting three written estimates, and then I’m going to choose. Can you email me a cost-estimate worksheet stating all the fees and the interest rate?”
Be sure to get the estimates on the same day, as rates can change quickly. Also, don’t ask for rates and fees by phone; unscrupulous brokers will simply lowball their estimate to get you in the door, says Rowley. (Women don’t shop enough for home loans)
When it comes to shopping for a mortgage, finding the best loan can make all of the difference. Take your time to shop well. We hope you’ll pass along these tips to a friend.