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What Research? Americans Research a Car Purchase More than Their Home Loan

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RISMEDIA, April 7, 2008- Despite the fact a home is one of the largest and most expensive purchases most Americans will ever make, those adults who have obtained or refinanced a home loan in the past 5 years typically spent only 5 hours researching a home loan, according to a recent survey(1) of 2,897 adults conducted by Harris Interactive(R) on behalf of leading real estate website Zillow.com. In fact, more time is typically spent researching a car purchase (8 hours) or major home improvements, such as a kitchen remodel (10 hours), and equal time is spent planning a single vacation (5 hours)(2). When calculated as time spent per dollar invested, this means Americans typically spend almost 80 times more time researching their vacation (.159 min./dollar) than a home loan (.002 min./dollar).

In retrospect, borrowers seem to indicate a desire to be more informed in the future. Those who obtained or refinanced some type of mortgage or home loan in the last five years secured an average of 4 quotes, but those who plan to obtain or refinance a mortgage or home loan within the next year say they expect to obtain 6 quotes, on average.

Home Related Investment Typical Hours of Research (2)  Average Cost Per Dollar  Minutes Spent 
 Vacation  5  $1,883 (3) per week  .159
 Mortgage/Home Loan  5  $135,313(4) (home)  .002
 Car  8  $287,159(5)  .017
 Home  39  $224,890(6)  .102
 Major Home Improvements  10  $47,500(7)  .013
Computer  4  $3,000(8)  .080
 Television  2  $783(9)  .153

Of adults who say they plan to be in the market for a mortgage or home loan in the future (mortgage, refinance, HELOC or other home loan), 82% of them say they have concerns about doing so. The primary concern among these borrowers is having their personal information sold or shared with multiple lenders (58%).

The top five concerns:

– Having personal information sold or shared with multiple lenders (58%)
– Sharing personal information and credit score with multiple lenders (55%)
– Missing the opportunity to get the best rate (54%)
– Ending up with a monthly payment that is greater than original budget (48%)
– Not understanding the terms and financial implications of the loan (41%)

“What most people don’t realize is the type and terms of a loan are often more significant than the actual purchase price as these factors can dramatically affect the affordability of a home,” said Spencer Rascoff, Zillow chief financial officer. “Financing a home is one of the largest investments most people will make in a lifetime yet people typically put more time into buying a car and as much time into researching a single vacation than they do a home loan. Despite this clear imbalance of effort, we’re encouraged that borrowers, on average, say they plan to secure more quotes on the loan they plan on obtaining or refinancing within the next year, which we think signals a desire for greater options and information to help alleviate the primary concerns of borrowers.”

Of those who plan to be in the market for a home loan in the next year:

– Nine out of 10 (91%) agree a standardized quote form would make it
easier to compare loan quotes from multiple lenders.
– 82% believe the recent interest rate cuts by the Federal Reserve make
it more attractive to shop for a home loan.
– 77% say they would obtain more mortgage or home loan quotes if they
could do so anonymously.
– 61% rely/would rely on others’ input when selecting a mortgage lender.
– 56% would obtain more mortgage or home loan quotes if I had more time
to do so.

“Zillow has expanded into the home financing arena with today’s launch of Zillow Mortgage Marketplace that we designed to help illuminate the complicated lending process and provide borrowers greater control and transparency than exists elsewhere and addresses many of the common borrower concerns and preferences,” added Rascoff.

For more information, visit www.zillow.com.

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