Find five different online mortgage lenders such as http://www.lendingtree.com/mortgage-rate.
From these five lenders, find the following mortgage rates: 15 year (if available) and 30 year.
Convert the Annual Percentage Rates into Effective Annual Rates (EARâ€™s).
Discuss which rate is actually the lowest rate and highest rate. Why is this the case?
- Present the quoted (stated) rate, APR, and EAR rates in a table listing the lender, and length of loan.
- Why do the different lenders have different rates?
- Explain how the Truth in Lending Act governs the APR?
- What are three common mistakes most homebuyers make when looking at quoted mortgage rates?
- Considering the time value of money, if an investor choses a 30 year mortgage, what does that choice indicate about their expectations of the time value of money?
- Is the difference in rates going to have a material impact on the cost to the home buyer? Explain your answer.