February 9th, 2016 2:50 PM by Richard Sardella MLO.100007700/NMLS 233568
As a consumer, I have personally noticed mortgage lending commercials
blowing up in all media since the end of the year. Reasons can be attributed to the
"expectation" of higher interest rates in 2016. Lower loan volume will cause lenders to spend
more money for their percentage of market share. However, interest rates have actually Lowered
in 2016 and lender's have changed their goals to capitalize on volume while lower
interest rates are available.
As Colorado Home Mortgages has always offered free, no-obligation
pre-approvals, credit scores and secured digital delivery of information, I was
curious of who is paying for these commercials and spokesmen?
In a 30 year fixed rate comparison February 9th, 2016, I
proposed a Colorado owner-occupied home purchase of $350,000 using 20% down payment, $280,000
loan amount with 740+ credit scores.
Here is what I found:
The company advertising Low, Low Mortgage Rates, which are
unavailable without completing a lengthy online application (including your
social security number) or waiting for them to contact you back from what
information you did provide, sent an email including the following:
3.50% 30 year fixed with P&I
Payments of $1257 - 1 point
b. 3.625% 30 year fixed with P&I Payments of $ 1277
3.75% 30 year fixed with P&I
Payments of $1297 Zero points and $1400 credit
d. 3.875% 30 year fixed with P&I Payments of $1317
Zero points and $2800 credit
Simultaneously, Colorado Home Mortgages publically posted
the following at www.CoMtgs.com/RateSheet:
30 Year Fixed Conforming
The APR is calculated using a loan amount of
$280,000 and these typical fees.
Of course interest rates are subject to change without
notice and may not be applicable for all borrowers and/or scenarios, but the
short comparison answer is:
On a $280,000 loan amount, it appears the Low, Low Mortgage Rate
company would charge $2,800.00 in additional
closing costs/points for the same interest rate, or offer an interest rate at
least .125% higher.