Mortgage loan comparisonscan be very confusing. There are numerous mortgage categories and then within each category one can create an endless number of products by altering the rate, the points and even the closing fees. Hence, the same lender can offer 10, 20, or 30 year FRM (fixed rate mortgages) each requiring different up-front fees and points and different monthly payments. The following web site exercises will help you to:
• Compare types of mortgage loans offered by different lenders.
• Compare various 30-year FRM offered by the same lender.
Do the following:
Go to: hsh Under Local Lender Showcase, Select Pennsylvania for State, 200000 for Loan Amount and Purchase for Loan Type. Then hit Search. You will now see a few lenders listed on the top under Mortgage rates from lenders in your area and several others below that.
A. One at a time, click on any three of the lenders (on their name) that are listed in the top group.
List 3 different types of mortgages they offer. If you do not see a list of mortgages, just click on another lender.
B. Select an identical mortgage product for all three lenders and compare the rates, the points and the APR. Which one would you prefer? Why?
C. Click on the mortgage product itself of any of the lenders (30 yrs Fixed) find one that offer 3-4 different mortgages of the same categories and compare them.
Now go to www.interest.com. Under Home Loans, click on Mortgages (on the top of the page). In Find A Mortgage Rate select:
Pennsylvania
Philadelphia
200000
30 yr fixed
Then click on Find Rates
You will see a long list of mortgage lenders and their loan offers. Print 1 page of your results.
Change the assumptions. (Change back to PA and Philly). Instead of Fixed rate, select 5/1ARM..Print this page. (A 5/1 ARM is a mortgage whose rate is fixed at the reported rate for 5 years and then can change each year after that.)
Compare three of the loans on each page with respect to interest rates, monthly payments and fees. Which of the loans would you prefer? Why?
Now go to www.bankrate.com. Select “mortgage” and “30 yrs Fixed”, and click on “Next”.
Under “sort by”, sort once by Fees, Once by APR, and once by Points and in each case compare the offers of the first 3 lenders.
Just for your information: Another great mortgage comparison site is www.mortgagenewsdaily.com, under mortgage rate, click on compare rate and then on PA and again you have numerous comparisons alternatives.
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