Bank Mortgage Rates - Swing Low, Swing High
You can benefit from a bank mortgage rate on your purchase mortgage, refinance mortgage or home equity loan. However, before you choose a lender, do your homework. Mortgage loans come with many different choices in terms of length of loan, type of interest rate, and mortgage rates and mortgage fees.
Searching for the right home loan and best mortgage rates takes time and preparation. Mortgage rates are not consistent. They vary over time, lenders, borrowers, and types of mortgages. The general rule is that the better your credit rating you have the better interest rate you will receive.
In order to review bank mortgage rates learn about:
- Mortgage Rates – Comparing bank rates, fees and monthly payments
- The big mortgage banks of 2012.
- Getting today’s mortgage rates
Mortgage Rates – Comparing Bank Rates, Rees and Monthly Payments
Comparing bank rates is confusing. Sure, you can look at the APR, but even that gets confusing. What is included, or better yet, what is the bank hiding? Bank rates are published by:
- Interest rate: Nominal interest rate
- Points: Origination and discount points
- Lender fees: upfront fees.
- APR: Annual percentage rate, meant to translate the cost of the fees into the interest rate. Most APR’s do not include the compounded or effective interest rate. There are two other problems in calculating the APR:
- Most people do not carry the loan to the end, so if the loan is prepaid, then the upfront fees will have a larger upward effect on the APR.
- In order to calculate an ARM’s APR, you have to make many assumptions regarding the movement of the future interest rate. Most banks’ mortgage rate tables show an APR for an ARM based on the original period’s interest rate and then an adjustment based on today’s calculation for the index and margin.
- Mortgage Insurance: If your LTV is over 80%, or you take a FHA loan, then you will be charged mortgage insurance. Bank mortgage rates do not include mortgage insurance in their APR calculation.
- Best rates: Remember, bank mortgage rates are different if you have an excellent credit score or a good credit score. Rate tables assume excellent credit, a LTV under 70-75% and other underwriting assumptions. (Once again, many borrowers who have a higher LTV will have mortgage insurance, which will affect their payments).
In order to give you an idea of how bank mortgage rates work, look at the following table for a loans offered from different Banks, as published on their Websites in late June 2012. (The rates are for illustrative purposes and have many lending criteria and assumptions. Also check with your lender for a real binding offer)::
|Wells Fargo||Chase||US Bank Home||Quicken Loans|
|Some Restrictions||25% down payment. 90-day lock. Excellent credit.||20% down payment. 60-day lock. Excellent credit.||20% down. Conforming Loan.||30% down payment. Excellent credit.|
|5 year APR payoff would be:||4.368%||3.798%||4.14%||4.031|
This rates are for illustrative purposes and fluctuate. Payments included principal and interest only. Some state and county limits may apply, as well as special taxes.
Comparing is not so simple, as each bank publishes a rate based on varying credit and LTV requirements. You can’t compare the payments, as each bank uses a different loan amount. In addition, lender fees have to be carefully examined, to make sure that all fees are included.
In addition, the APR assumes that you will pay off your loan over the entire 30-years. However, if you were to pay off the loan after 5 years, the APR would be different as shown in the last row of the column.
The Big Mortgage Banks of 2012
Whenever you are searching for a mortgage loan, you will come across the names of the big mortgage banks. Big banks do not necessarily mean better rates or better service. The big banks do advertise, and have online sites which provide much information about their mortgage programs, including bank mortgage rates. According to mortgagestats.com the top residential mortgage lenders for the first quarter of 2012 are:
|Rank||Company||Origination (millions $)||Market Share|
|1||Wells Fargo & Co.||$130.357||31.25%``|
|3||U.S. Bank Home Mortgage||$20,051||4.81%|
|4||Bank of America||$15,998||3.83%|
|8||Quicken Loans Inc.||$10,897||2.61%|
|9||Provident Funding Associates||$9,109||2.18%|
|10||Ally Bank/ResCap (GMAC)||$8,596||2.06%|
Market share information is based on an estimated total market size of $417,196,000,000
Bank Mortgage Rates - Getting Today’s Mortgage Rates
Today, it is easier than ever to find out today’s mortgage rates. Shown below is Bills.com mortgage rate table.
The general rate table is based on the lowest mortgage rates for borrowers with excellent credit and a moderate LTV ration. You can also get customized interest rates based on your credit score, property type, address, and LTV. The table also offers you a link to get mortgage quotes from Bills.com mortgage providers.
Look Online at Some of the Big Mortgage Lenders Websites
In order to find the lowest mortgage rate look at different websites from big lenders. For example, Wells Fargo, Bank of America, and Quicken Loans all have mortgage rate tables on their website. Some lenders, such as Wells Fargo will send you an updated mortgage rate table to your email address every day.
Lender’s mortgage rate tables show the lowest interest rate offered for different:
- types of loans (conventional and FHA loans),
- purpose of loan (purchase, refinance, home equity)
- periods (generally 15 years and 30 years)
- Interest rates (fixed and variable).
Usually the mortgage rate tables assume that you have excellent credit a LTV ratio between 70-80%. Mortgage fees vary from lender to lender. Since mortgages are complex products, there are many assumptions made about fees, credit requirements, mortgage insurance requirements and escrow accounts. Big lenders like the Bank of America and Wells Fargo offer rates based on your zip code, and size of loan.
Shop Around: While browsing for the lowest interest rates available is helpful, in the bottom line, shop around. Learn about the mortgage market, how to qualify, and prepare yourself so you can get the lowest interest rate available.