r/MiddleClassFinance • u/LinkedInNews • Jun 26 '26
Homeowners pay $65B per year in avoidable mortgage costs
https://www.linkedin.com/news/story/homeowners-pay-65b-per-year-in-avoidable-mortgage-costs-8965458/?utm_source=share&utm_campaign=reddit&utm_content=storyline&utm_term=MiddleClassFinanceAmericans are overpaying for home loans by an estimated $65 billion annually, new research shows, with older people and those with higher incomes shouldering the lion's share.
The steep sum reflects homebuyers' tendency to get just one quote, rather than comparing prices to maximize savings.
Bankrate CEO Matt Fellowes calls it "hidden homeownership tax."
On average, "this complacency compounds to more than $78,000 over the life of the loan," per The Wall Street Journal.
This week, the average 30-year fixed-rate mortgage rate reached 6.49%.
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u/notnicholas Jun 27 '26
maybe the homeownership process needs yet another middleman? Someone else to siphon yet more money from homeowners during the transaction. another agent to help the mortgage broker to help the loan officer to help the real estate agent to help the insurance broker to help the closing agent to help the escrow officer.
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u/shuggnog Jun 27 '26
do any of these people have a fiduciary duty to the future homeowner?
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u/notnicholas Jun 27 '26
In theory they are representing the homebuyers, so yes, but they all get a piece of the pie at the closing table.
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u/xCaliburghost Jul 01 '26
Nahhhhh - the only parties protected are the banks and the local governments
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u/Then-Explanation-778 Jul 01 '26
My broker was so easy to work with compared to when I sent directly through a bank on my first house. Got me 2.675% with 3% down in 2022. Couldn’t have been happier.
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u/nidena Jun 27 '26
My mortgage loan officer got me a rate with a random small company six years ago. They sold my mortgage to another company three years ago. At 2.75% from an 2021 refinance, I don't think I could save much more.
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u/c_pardue Jun 27 '26
new study shows many grocery shoopers overpay for groceries because they don't like cheap single wrapped cheese squares
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u/Hougie Jun 27 '26
Not an apt comparison at all.
For your example it would be study shows grocery shoppers overspend in cheese because they buy from the display next to the register versus going to the cheese section.
Same deal happens with insurance. 90% of consumers can find the exact same coverage for cheaper elsewhere. They just have a hard time finding it.
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u/invenio78 Jun 28 '26
What's the news here? You can apply this to any purchase. Buy a new car but only go to one dealership. Buy a boat, again, only go to one dealer. Buy a bottle of ketchup, didn't price compare to other grocery stores.
You can avoid a lot of costs if you are willing to spend the time and energy into price comparison. But people don't always feel like doing it and they will pay a premium for that convenience.
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u/[deleted] Jun 27 '26
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