The mortgage fees consumers are charged also vary significantly state by state, the report found.
Fees ranged from around $500 to $7,000, while at the high end, home buyers in certain states paid 644% more in fees, according to the report, which used data from the Home Mortgage Disclosure Act database and the Consumer Financial Protection Bureau.
Hawaiians and Washington, D.C., residents spent over $5,000 on mortgage fees in 2018, Clever reported.
While the average borrower was charged a little less than $2,000 (or 1% of the loan amount), Hawaiians were charged three and a half times more on fees. South Carolinians and Pennsylvanians, by contrast, were charged less than $600 on average.
The findings are not only startling, but suggest that advisors should offer assistance to clients in need of a mortgage. Investors would undoubtedly rather save or spend mortgage savings.
While some advisors do the legwork to comparison shop and find a pool of preferred lenders for clients to use—and dually registered brokers may have access to mortgage products on their broker-dealer’s platform—not all advisors get involved with mortgage negotiations, an area where they can really deliver cost savings and value.
Americans are in debt, after all, and a large chunk of that debt is allocated to mortgages. After increasing for 21 quarters in a row, mortgage debt in the United States has reached an astonishing $15 trillion, according to the Federal Reserve.
Not surprisingly, borrowers in states with higher mortgage payments had the most complaints, and nearly one out of three complaints was related to borrowers struggling to pay their mortgages, lending support to the idea that some home buyers are overborrowing, the study reported.