Harney: Be sure to shop around for mortgage

CFPB researchers also found that rate quote variations among competing lenders for the same prime borrower — with a high credit score, 20 percent down payment, seeking the same mortgage amount — frequently vary by one-half of one percentage point. That may not sound like much, but the bigger the loan and the longer it continues, the heftier the dollar savings for borrowers who shop and nail down the best-priced money. Even on a $200,000, 30-year fixed-rate loan, choosing a lender quoting a 4.5 percent rate, compared with a lender who’ll do the loan at 4 percent, can cost you $3,500 in the first 60 months alone. Compare that with saving a few bucks filling up on gas.

New studies suggest that the spread between high and low quotes available to borrowers may be higher — even increasing. Lending Tree, an online network with 342 mortgage companies competing for homebuyers’ business, found that the median spread between annual percentage rate quotes to individual borrowers for each loan request on its platform was six-tenths of a percentage point during the week ending March 11. That was up by more than a tenth of a percentage point from a year ago.

What that means is that you as a potential applicant, presenting the identical characteristics to each competing lender — same credit score, same loan amount, same everything — would likely see a high-low spread of nearly six-tenths of a percent in quoted APRs. (The annual percentage rate measures the cost of the loan when fees are added into the quoted interest rate, thereby giving a more accurate picture of the true cost per year.) That spread in the case of a $300,000, 30-year fixed rate mortgage translates into $26,780 over the life of the loan.

Another online platform that allows lenders to make competing offers, Zillow Mortgage, conducted a data analysis exclusively for this column that showed the median high-low APR spread in offers on its network of hundreds of lenders and brokers to be even wider — just under seven-tenths of 1 percent on a 30-year fixed loan with 20 percent down.

Erin Lantz, vice president of mortgages at Zillow Group, says homebuyers’ willingness to forgo shopping among multiple lenders “is a head scratcher.” A “fear bar” may be part of the problem, Lantz believes. There “are a lot of numbers, a lot of terms that are foreign” in mortgages, she says, which for some buyers can be intimidating.

Though there are other online shopping platforms, Lending Tree and Zillow are major players, easy to use and free. There are noteworthy differences, however. Lending Tree promises you up to five firm offers from competitors but requires you to submit personal identifying information so lenders can evaluate your application. Zillow Mortgage does not require personal information and says it averages 30 return quotes per inquiry, but the quotes only become firm when you actually apply to a specific lender, and that requires submission of the usual personal information needed for underwriting.

Bottom line: Don’t go limp. Get active, shop for your mortgage money, and save a bunch when it really counts.