You could be wasting over $3,000.00 a year paying your mortgage, according to a new study conducted by Bankrate, that found 9 in 10 homebuyers didn’t get the lowest mortgage rate available to them and, as a result, are overpaying for their home loans. In the Houston market, that’s nearly $27,000.00 over an 8-year period and 75,000 over the life of a 30-year loan. Bankrate’s Alex Gailey says it’s property taxes and interest that adds up and this is avoidable. “We did extensive research over the last 2 decades that goes deeper into the reasons why people are paying what they do for their mortgage. Majority of the time they are stating in these surveys that they are not shopping and looking at more than one lender an went with someone that their close to or the recommendation of their realtor.” She said.
Victoria and Tyler, TX were at the top of the list for having overpaid the most. “It’s not just pricey coastal metros getting hit hard. There are a lot of smaller markets. Outside of Houston, five Texas metros: Victoria, Tyler, Midland, Longview, and Odessa were within the top 25 for overpayment.” Gailey said.
The analyst says too often home buyers settle and don’t shop the market. “Every lender has a different business model and cost structure, and so there is differences in how these are priced. Lenders have flexibility especially for conventional mortgages.” She said. In addition, consumers should get competitors rates before sitting down and they can ask them to get a lender credit, waive origination or registration fees. Get a diverse mix such as 3 lenders- a national lender, a local credit union, a realtor’s referral, and be sure to use digital comparison tools. She says to branch out. “That $3300.00 a year that’s add up over a lifetime.” Gailey said.