There’s a surprising new finding that says women get lousier mortgage rates than men, but not because of gender discrimination. It’s because, instead of shopping around for cheaper loans, they rely on the recommendations of friends.

To recap: When it comes to mortgages, women don’t shop enough.

Editor’s note: This article is republished with permission from AOL Real Estate. View the original article: "When It Comes to Mortgages, Women Don’t Shop Enough."

By ANN BRENOFF

There’s a surprising new finding that says women get lousier mortgage rates than men, but not because of gender discrimination. It’s because, instead of shopping around for cheaper loans, they rely on the recommendations of friends.

To recap: When it comes to mortgages, women don’t shop enough.

The report, published in the Journal of Real Estate Finance and Economics, set out to explain why women were 32 percent more likely to get a subprime mortgage than men in a 2006 study. According to a team of researchers led by Florida Atlantic University’s Ping Cheng, the answer wasn’t discrimination because of gender or even income disparities.

Women pay higher rates because they are more likely to listen to friends’ recommendations, whereas men are more likely to shop around for the best deal.

"Our empirical test confirms that search effort is rewarded in (the) marketplace, and suggests that gender disparity in mortgage rates may be addressed by policies aimed at improving women’s financial literacy and search skills," the report summarizes.

It makes sense to Daily Finance columnist Laura Rowley. "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 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.

For more tips on shopping for a mortgage, see these AOL Real Estate guides:

 

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription
×