Mortgage Rate Tables 101

How to Maximize Your Investment or Minimize your Cost

Mortgage Rate Tables 101
October 30, 2020

Rate shopping for mortgages can be time consuming, because comparing the variety of available offers is not straightforward. You have fixed versus adjustable rate loans, credit ratings, fees, and other considerations to sift through. It would certainly be helpful to have a centralized location to view mortgage rates – and we are happy to provide one for you.

The links on the MoneyTips home page, in the right hand column under "Today's Mortgage Rates," will take you to our mortgage rate comparison menu, where you can choose from a variety of rates and scenarios to compare while still in your pajamas. Here's how it works:

  • Select Your Scenario – Select the "buy" or "refinance" buttons, enter the value of the home and the down payment (if buying) or the remaining loan balance (if refinancing), the location of the home with both state and county, your credit rating range, and whether or not you want to include points (an extra amount paid upfront to reduce the interest rate of your loan).

    A drop down menu allows you to include additional options – the type of home and its primary use, second loan balances and cash-out refinancing amounts, and whether to include FHA or VA loans in your search.

  • Review Options – A menu of potential lenders and loans that fit your criteria will pop up, allowing you to see interest rates, APR (Annual Percentage Rates including other fees and costs) and monthly payments for each loan.

  • Comparison of Offers – You can choose up to four offers to directly compare more detailed information, including the adjustment information on adjustable rate mortgages (index margin, cap, and estimated payments after the first adjustment period), a listing of the lender fees, and the estimated total cost of the loan.

The ability to compare different scenarios lets you test the effects of changing one variable, and allows you to find limits.

For example, let's assume you want to figure out how much home you can afford to buy with the down payment money that you have. You can select all of the available loan types and get a direct comparison of costs and terms for different lenders and loans.

Here are some other scenarios you could test:

  • Changing Your Conditions to Increase Your Investment – If you were to take more time to improve your credit rating or save up more money for a higher down payment, how much of a higher dollar value house could you afford?

  • Refinancing Opportunities – Can you find a suitable rate and terms that make refinancing an economical option for you to lower your monthly payments?

  • Buy Down Interest Rate – What effect will points have on your monthly payment and total interest paid? How many can you afford before the upfront costs become excessive?

  • Minimize Monthly Payments – For a given home value you want to buy, what loan and lender minimizes your monthly payments? How much does minimizing the monthly payment cost you in the total cost of the loan? If you were to wait to save more down payment money, would it be worth the risk if the interest rate rose by some given amount (say 0.5%)?

If all else fails, this will give you a healthy frame of reference to use when comparing mortgage offers with other banks in your area. Since you have run through different scenarios, you will be able to spot good deals, and you will also have more informed questions to ask about fees and other terms. Enjoy this easy way to start refinancing or shopping for a new home. For the latter, we recommend changing out of your pajamas before visiting open houses!

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