Sunday, September 27, 2009
Monday, January 14, 2008
NAR's HousingMarketFacts.com and Equity Estimator Calculator Fall Short
First get ready for the talking website... always a crowd favorite, right?
The facts the NAR highlights are very well known and basically revolve around the idea of homes increasing an average of 6%, yet the most recent report indicates an anticipated growth next year of only 3.1%.
The NAR could have created a really nice tool to highlight market conditions along the tools like Trulia's heat maps, Zillows price charts or Altos Research to really educate the customer but instead took the easy route and came up way short.
Especially interesting to me is their Equity Estimator Calculator. It has a basic calculation but you don't see how they came up with the results. You simply enter your down payment amount it and tells you how much return on your down payment. The percentages are always the same regardless of what amounts are entered?
I created a similar home equity growth calculator last year that displays all the calculations on a month to month basis but also factors in a mortgage amortization schedule and equity growth.
Do you think the NAR should spend millions in TV commercials and advertising to promote the market with a website that is thin in useful information? Lastly does the NAR equity calculator seem accurate to you or does our equity estimator seem more useful?
Wednesday, November 28, 2007
The First Mortgage Lending 2.0 Mashup?
There is lots of talk about Zillow entering the mortgage lending space and creating Mortgage Lending 2.0.
Currently the issue is most mortgage web sites don't actually help consumers do anything, they are simply lead companies who resell the data. Current consumers will check current rates on a site like Bankrate, if rates are lower than what what they currently have they will go to LendingTree to complete a form to have lenders call back and calculate the actual savings of refinancing. At that moment the consumers credit is ran which increases the chance of dropping their FICO scores, even if the consumer decides not to refinance because the savings don't make sense.
If the savings are not large enough, the lenders will usually try and sell a "creative" financing option to save the deal. That's where trouble sometimes happens as evidenced by the current mortgage crisis and the millions of borrowers who got "sold" a creative loan.
Not a very efficient process.
We believe we have taken the first step into mortgage lending 2.0 with a dock-able mortgage widget.
We mashed up a mortgage calculator, mortgage rate feed, monthly / annual / life savings calculation into a single widget that they users can access anytime without providing any personal information, no running of credit and no pressure.
This mortgage widget installs directly onto your IGoogle.
Install the refinance calculator gadget onto your igoogle now and give us your feedback.
Are tools like this the future of mortgage lending and is this the first mortgage lending 2.0 mashup?
Saturday, July 21, 2007
Facebook API App Explosion... 8 Mortgage Calculators
We noticed that there was not any mortgage calculators so we programmed a few a for you to install in your facebook account.
Mortgage Calculator - calculates 10-50 yr mortgages both fully amortized and interest only loans.
Side by Side Mortgage Comparison - calculate payments of up to 4 loans side by side at the same time.
Pay Option ARM Loan Calculator - Displays worst case scenario adjustments
Loan Amortization Schedule Calculator - Creates a monthly amortization schedule.
Adjustable Rate Mortgage Calculator - Displays worst case scenario of adjustments for ARM loans.
Blended Rate Mortgage Calculator - Got two loans? Calculate the "blended mortgage rate" of a first and second mortgage to help you determine if you should have a single mortgage.
Home Buying Monthly Budget Calculator - Thinking of buying a home? This calculator helps you calculate your net income monthly income after cost of living bills and mortgage payments.
Real Estate Investment Calculator - Calculates the monthly equity growth of your real estate investment through price appreciation and mortgage amortization pay-down.
Please try them out and provide us some feedback as to the usefulness of these facebook apps. You can access all of these calculators on or site at mortgage-info.com.
We will be keeping on eye on the growth of these types of apps and the impact of it on the mortgage landscape.
Tuesday, May 08, 2007
BofA Skews Truth About New Smoke and Mirrors No Fee Mortgage Loan
No Closing Costs and No PMI for loans over 80% LTV at competitive rates.
Yet, Bank of America's website loan disclosures state differently... don't fall for this corporate "bait" as I will prove below.
BofA made some pretty bold claims in it's press release like this...
-- No Private Mortgage Insurance: No Fee Mortgage PLUS eliminates the need
for PMI, which is usually required for a loan-to-value greater than 80
percent. Bank of America enables borrowers to get into their home
without the need to bring 20 percent to the closing table in order to
eliminate PMI, which not only reduces cost but also eliminates anxiety
and uncertainty in the homebuying experience.
News agencies then give millions of dollars in trusted advertising by reporting it like this...
CNN.. " It also won't charge for private mortgage insurance - often required for borrowers who put less than 20 percent down."
Inman News... "but lets them make a down payment as small as 5 percent without having to purchase private mortgage insurance."
Milwaukee Biz Journals... "No Fee Mortgage Plus eliminates application fees, lender fees and the need for private mortgage insurance."
San Diego Source... " It also will not require private mortgage insurance on loans with less than a 20 percent down payment."
Does this sound too good to be true? That's because it is!
The way the loan really works, is that they charge you a "higher then normal" interest rate to pay / subsidize these closing costs that are "not being charged" by BofA. Instead of paying for the fee's out of pocket, you are simply financing them via a higher mortgage interest rate for the entire life of the loan.
Matt from Inman was the closest to getting the truth from BofA as reported in his Inman news piece..
In a conference call with reporters, BofA officials avoided the question of whether they would be recouping those expenses by charging a higher interest rate or points for the loan.
"It's not about interest rates, it's about value," said Floyd Robinson, BofA's president of consumer real estate, when asked whether the loan would carry a higher interest rate. When the loan's elimination of fees, private mortgage insurance and other features are factored in, he said, "We're confident the customer will feel (BofA's no-fee loan is) the best value."
This makes sense if you are keeping the loan for a short amount of time but if you anticipate to keep it for 30 years, it may cost you thousands more. Also, this is nothing new or exclusive... any and all lenders can offer this same mortgage program.
The smoke and mirrors part of this is Bank of America is stating to everyone that it will not charge for PMI but yet... directly on their website mortgage disclosures you will find this:
No Private Mortgage Insurance
There may be an incremental cost for the No Private Mortgage Insurance (PMI) option.
Read the entire BofA disclosure here.
Hmm... there may be a cost? I thought you (Bank of America) said that I won't be charged PMI?
How can companies get away with this smoke and mirrors tactic?
Remember... big print giveth... little print taketh.
Always, start with the fine print.
When shopping for a mortgage the numbers don't lie. Here are some mortgage calculators to help you with your mortgage decision. What does PMI actually cost... here is a PMI calculator.