ATLANTA — A new Bankrate report suggests many Georgia homeowners could save thousands of dollars by shopping around for a better mortgage rate.
According to the analysis, a little under 90 percent of Georgia homeowners are paying more than they should on their mortgage.
“About 87% of homebuyers in the state of Georgia are over paying for their mortgage,” Bankrate analyst Alex Gailey said.
Gailey said many borrowers do not realize they should compare mortgage rates from multiple lenders.
“The heart of the problem here is that the majority of people don’t even know they should shop around for a mortgage, they assume that their loan terms are the same with every lender and the costs are as well and that’s just not the case,” Gailey said.
Bankrate found the typical borrower is paying about $3,300 more per year than necessary because they did not compare rates.
“Our data shows that not comparing rates ends up costing the typical borrower over $3,300 a year,” Gailey said.
The analysis estimates that excess interest costs add up to nearly $80,000 over the life of a 30-year loan.
Gailey said homebuyers should approach shopping for a mortgage the same way they would when buying a car or shopping for insurance.
“People don’t approach shopping for a mortgage like they do with insurance or even buying a car, and they should. The best thing you can do is break out of that single quote loop,” Gailey said.
She recommends buyers get at least three different quotes from multiple lenders and try to obtain those quotes on the same day to accurately compare offers.
“So instead of just going to the bank that you’ve been with for a long time and/or taking a recommendation from your realtor, get out there, do your own research, get multiple quotes from different lenders, ideally at least three and ideally on the same day,” Gailey said.
Current 30-year fixed mortgage rates in Georgia are around 6.35%, and Bankrate says even small differences in rates can lead to significant savings or additional costs over time.
According to the report, the average monthly mortgage payment in metro Atlanta ranges between $2,300 and $2,600. Bankrate also notes that Georgia has one of the highest mortgage default rates in the nation.
