How to Find Mortgage Information
There are so many options in home financing that it really does pay to
shop around. This lesson explains how to find the mortgage info
that you need - quickly and efficiently.
Where to Look
The fastest way to gather information
is via the internet. A quick online search will reveal many sources of
vital mortgage information. Here are several I found on the day I searched.
- E-Loan.com.
This site is easy to use, and it provides a wealth of
useful information.
You can quickly find interest rate, points, and fees for
fixed-rate and adjustable-rate mortgages. And all of the
information is tailored
to your situation: your loan amount, your part of the
country, your credit history, etc.
- Amerisave.
This site is also easy to use, and it also provides a lot of
good information - interest rates, points, and fees for
fixed-rate and adjustable-rate mortgages. And, like E-Loan,
all of the information is tailored
to your situation: your loan amount, your part of the
country, your credit history, etc.
- Quicken Loans.
This site provides up-to-the-minute info on current rates
for some common loan packages (e.g., a 15-year fixed rate loan,
a 30-year fixed-rate loan, and a 5-year adjustable rate
mortgage).
Use this information to
conduct a preliminary mortgage analysis,
a topic covered in the next lesson. Following the preliminary analysis,
you will be prepared to
choose a loan provider, either directly or through a mortgage broker.
What to Look For
Previously, we discussed
factors that contribute to loan cost (e.g., interest rate,
points, closing fees, etc.). You will need to gather
this information for each mortgage offering that you consider.
In addition, you need to know the
term of the loan and the number of payment
periods. For adjustable-rate mortgages, you need to know when the first
adjustment period
occurs, as well as the schedule for any subsequent
adjustment periods. And you need to know about
rate caps,
periodic caps, and
lifetime caps.
And finally, if you are considering non-traditional mortgages
(e.g., a
convertible ARM,
two-step mortgage,
or
balloon loan),
you need to collect info on the special terms and conditions
associated with those options.
This information will be input for your analysis. You will plug the
data you collect into the
mortgage calculator
in order to compute
the total cost of the mortgage, as well as other financial outputs.
Narrow Your Search
Based on your mortgage goal
(see previous lesson), you may
be able to eliminate certain kinds of mortgages from consideration.
Consider the following examples.
- Dick is a risk-averse retiree who plans to live in his new home
for a long time. To guard against rising interest rates, Dick has
the following constraint on his mortgage goal: The interest rate
should remain
constant during the life of the loan. Based on this constraint,
Dick does not need to gather info on
adjustable-rate mortgages; instead, he can focus on
fixed-rate mortgages.
- Jane is buying a house to live in while she attends college,
no more than 4 years. Jane has the following mortgage goal:
Interest payments over the life of the loan should be as small
as possible. Based on this goal, Jane might focus on
adjustable-rate mortgages
rather than fixed-rate mortgages, since adjustable-rate mortgages
tend to have lower interest rates in the first years of the
mortgage.
Like Dick and Jane, you can save time and energy by
focusing only on those types of mortgages that are consistent
with your mortgage goal.