Women, you need to shop moreby Tim Manni
Our headline may have husbands and boyfriends cringing the world over. But fellas, relax, I’m not referring to clothes, shoes or jewelry–I’m actually talking about mortgage rates.
For some time now there have been various reports and studies that indicate women consistently pay more for mortgages than men do. According to one new study, it’s not because of gender discrimination, but rather because women don’t shop enough for mortgage rates.
According to the study–Do Women Pay More for Mortgages?–published in the Journal of Real Estate Finance and Economics, “While the persistence of gender disparity may suggest discrimination, we offer a different explanation: women pay higher rates because they are more likely to choose lenders by recommendation while men tend to search for the lowest rate.”
Women tend to follow family advice
So while men may be more apt to shop around for several different rate quotes, women tend to follow the advice offered by family or friends when making this type of financial decision.
“I’m not surprised at all by the study’s findings,” says Lynnette Khalfani-Cox, personal finance guru and contributing writer to HSH.com. “I don’t know a single woman who is not pressed for time. Listening to family and friends can simply be the path of least resistance.”
Women often inherit financial advisors and institutions, explains Khalfani-Cox. “It’s an affinity factor,” she says. “Many women are thinking: ‘If my mom, sister and friend all use this mortgage lender, why shouldn’t I?’”
According to a 2010 survey conducted by Prudential Financial, while 95 percent of women are the financial decision makers in their households, 86 percent said they do not know how to pick out the proper financial products. (Prudential has run their survey for 10 years, updating it every two years.)
“People in your inner circle may be good sounding boards, but your social network is no substitute for a trusted, reputable professional,” wrote Khalfani-Cox on AOL Daily Finance last year.
There are tools and resources to help
Especially in today’s tough economic environment, mortgage shopping can seem like a daunting task. “Some people can perceive the mortgage-shopping process as time-consuming and over-complicated. But what they don’t realize is that there are tools and resources at their disposal,” explains Khalfani-Cox.
Websites like ours publish mortgage rates online. In addition to the countless number of articles and financial tools, HSH.com publishes weekly mortgage rate surveys and accompanying commentary explaining why rates did what they did.
Current mortgage rates
According to our latest Mortgage Rate Radar, a weekly survey conducted from Wednesday through Tuesday, rates on the most popular types of mortgages moved in different directions but remained nearly flat. The average rate for conforming 30-year fixed-rate mortgages fell by 5 basis points (0.05 percent) to 4.13 percent. Conforming 5/1 hybrid ARM rates increased by 3 basis points, at an average of 3.03 percent.
“Mortgage rates remained fairly steady over the past week,” said Keith Gumbinger, vice president of HSH.com. “More effort is being made to address the fiscal crisis in Europe, and moderate economic growth seems more firmly in place domestically. Investors seem to be pleased with both trends, and the result was a calmer market for a change.”
Flat mortgage rates and calm market conditions are important, noted Gumbinger. “Busy holiday seasons leave folks little time to react to buying and refinancing opportunities. Mortgage rates on an even keel allows more time for borrowers to take action without fear of missing out.”
It pays to shop around
Regardless of gender, I don’t think anyone enjoys shopping for mortgage rates. I think we all would rather brave the crowds and the long lines at our local malls this holiday season than call various mortgage lenders for rate quotes.
But remember, shopping for and locking in the lowest mortgage rate can save you thousands over the life of your loan. Take our advice and take some time out of your busy schedules and talk to several mortgage lenders before locking in an interest rate–it may be one of the smartest financial decisions you’ll ever make. And you just might be surprised that the process isn’t nearly as daunting as you may have perceived.