When buying airline tickets or a car, consumers automatically shop around for the best price. But not so for mortgages, Fannie Mae has found.

Most homebuyers do not obtain multiple offers or even compare interest rates when buying a home. Instead, 70% of consumers rely on the reputation of the financial institution when picking a lender, according a study the company released Tuesday.

"The trust and reputation of a lender is huge," says Steven Deggendorf, Fannie's director of business strategy.

The survey paints a portrait of consumers who simply do not understand mortgage products and costs, and who may be too bewildered by the daunting task of making their largest financial purchase to shop around for the best price.

"One way for banks to build trust is through the shopping process," says Sarah Shahdad, a Fannie analyst. "When you're shopping for an airplane ticket or hotel room, people tend to shop around and get multiple offers. But in mortgages where the stakes are high and the product expensive, it's not so easy."

One of the most shocking data points from the Fannie survey is that 58% of homebuyers did not report using any sort of calculator or tool to assist them in calculating how much they planned to spend on a home.

Though banks do have online tools and calculators to help consumers estimate the cost of a home loan, Deggendorf suggests they could present the information in a more consistent way so consumers can comparison shop.

"If all the points and fees were put in the rate, then the consumer could shop around," he says.

More than two-thirds of consumers Fannie surveyed said reputation is a major factor in their choice of mortgage lender. Having an existing relationship with a financial institution and referrals from friends and family also held far more weight among consumers than referrals from mortgage brokers or real estate agents.

Lender advertising held the least sway: Just 14% of lower-income respondents and a mere 4% of higher-income consumers said they were influenced to pick a lender because of an ad.

The survey also found that the majority of consumers could not guess the maximum percentage that a monthly adjustable-rate mortgage payment could increase over the life of the loan. A majority of consumers incorrectly guessed that a monthly ARM payment would rise between 1% and 5% when rates adjust after five years when in reality they can jump anywhere from 21% to 61%.

"A lot of adjustable-rate mortgages got a lot of people in trouble," says Deggendorf. "Certainly the literacy around ARMs is concerning."

The good news is that, unlike during the housing boom a few years back, borrowers do not appear to be taking on more loan than they can handle.

"There have been guardrails around the mortgage shopping process because everybody is pretty much getting a fixed-rate mortgage, so we're in a safe period for consumers," Deggendorf says. "At the same time, a lot of consumers can't get a mortgage, which is protecting them from taking too much on."

The risk of overpaying for a mortgage is much higher among low-income borrowers. Almost half of consumers who earn $50,000 a year or less got just one quote from a mortgage lender, a practice that the Department of Housing and Urban Development says can cost a borrower $1,000 or more in closing costs.

Among consumers who make $100,000 or more, 64% got more than one quote from mortgage lenders, compared with just 54% of lower-income borrowers. Not surprisingly, borrowers with a better understanding of loan terms are more likely to get a lower-cost mortgage, according to the Fannie survey, titled "Mortgage Shopping: Are Borrowers Leaving Money on the Table?"

The survey also found that technology is playing an increasingly important role in the process of shopping for a mortgage.

Among higher-income consumers, 74% used their cellphone to research a home and 68% did so to compare interest rates. For low-income borrowers, 56% used a mobile device to research a home and 50% used one to compared rates.

The Fannie survey was based on 3,003 telephone interviews made from April to June. Roughly 28% of consumers surveyed were renters and 12% were underwater on their mortgage, owing more than the home is worth.

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