Credit Sesame Offers New Mortgage-Comparison Tool
Anyone who has tried to evaluate mortgage options knows how mind-boggling it can be to compare different types of loans. Does an adjustable rate make sense? What about a 15-year loan? Is refinancing worth the upfront costs?
A new online tool from the financial Web site Credit Sesame, called a mortgage value map, aims to help simplify mortgage comparison shopping for the purchase of a new home or the refinance of an existing house.
“Most consumers simply want to know which loan costs the least or saves the most or has the lowest payments,” said Adrian Nazari, founder and chief executive of Credit Sesame, but gleaning that information from various loans of differing structures is a “daunting task.”
The tool’s simple user screen sits on top of complex analytical technology developed at Stanford University, Mr. Nazari said. The tool takes the information you enter — like the loan balance and interest rates, the number of years until the loan is paid off and estimates of your credit score and income — and applies it to available loans. It then produces a chart showing the lowest-cost option as well as the others so you can compare. For instance, in some cases a variable rate loan might be the lowest-cost option. But if you only want to consider fixed-rate loans, you can simply move down the list to the least-costly fixed-rate option.
For refinances, “it gives you the option that saves you the most, compared to your existing loan,” Mr. Nazari said, adding that the visual component makes the information especially easy for consumers to digest.
The tool would have been especially helpful before the housing collapse, he said, because it helps borrowers see that a lower payment might be attractive, but it may not mean that the loan is cost effective in the long run.
The tool also lets you play around with different variables — like the length of time you expect to hold the loan — to see how that affects the cost of the various choices.
The site works with a broad range of large national lenders and accesses about 80 percent of the mortgage market, he said. The lenders don’t pay a fee to be included in the tool, but they do pay Credit Sesame a fee if a consumer ends up borrowing money after finding the offer through the tool, he said.
Check out the tool and let us know what you think in the comments section.
-------------
credit : http://bucks.blogs.nytimes.com/2012/02/28/credit-sesame-offers-new-mortgage-comparison-tool/
No comments:
Post a Comment