You're probably overpaying on your mortgage by thousands of dollars a year.
New research from Bankrate finds most borrowers aren't shopping around for rates, leaving thousands of dollars on the table. The good news: it's not too late to save.
The report found that 87% of borrowers are overpaying, costing the average homeowner more than $3,300 a year. Over a 30-year loan, that adds up to more than $78,000.
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Bankrate calls it "the hidden homeownership tax." Analyst Alex Gailey explains a lot of it comes down to people not comparing lenders.
"It's happening because lenders aren't having to compete for your business nearly as much as they should be," Gailey said.
Many buyers — especially first-time buyers — go with a realtor's preferred lender or someone recommended by family and friends. But Gailey said it pays to compare multiple options.
"Take the recommendations, but also do your own research and do a broader market check and make sure you're comparing at least three or more lenders and ideally on the same day when you're getting that mortgage quote, because you want to have an apples-to-apples comparison as much as possible," she said.
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Submitting multiple rounds of tax returns and pay stubs may be a pain, but even a small difference in your rate could save you thousands over the life of your loan.
If you already own a home, the same advice applies when you refinance. Bankrate found many homeowners overpaid there, too. Before you sign, shop around, compare rates and see if your current lender will match a better offer.
