ONLINE MORTGAGE

Online Mortgage Lenders



Online Mortgage Lenders

Introduction

The mortgage, also known as mortgage loan is considered to be the easiest and fastest way to secure a loan for purchasing a home. In summary, a mortgage loan enables the person to obtain needed funds needed for building, purchasing and for renovation of house (Gitman & Zutter, 2011). Online mortgage can be taken on the property or to purchase a property already acquired by the applicant.

This paper compares the APR and EAR of the online mortgage rates of five different companies. This research paper also addresses the fundamental mistakes most home buyer makes when looking at quoted mortgage rates. It also evaluates the APR and EAR of different online mortgage companies with respect to its implication for the home buyer that help him in determining the overall cost of financing home. Five different online mortgage companies that have been included in the analysis include Lending Tree, Quicken Loans, Aim Loan, Amerisave Mortgage, and GMAC Mortgage.

Mortgage Rates

This section presents the rates of five different online mortgage companies that have been included in the analysis. These include Lending Tree, Quicken Loans, Aim Loan, Amerisave Mortgage, and GMAC Mortgage. Table presented below shows the quoted mortgage rate of the companies for the term period of 10 years, 15 years, and 30 years are as follows.

Lender Title

Time to Maturity

APR

Lending Tree

10 Years

NA

 

15 Years

2.970%

 

30 Years

3.620%

Quicken Loans

10 Years

NA

 

15 Years

3.330%

 

30 Years

4.038%

Aim Loan

10 Years

NA

 

15 Years

3.085%

 

30 Years

3.798%

Amerisave Mortgage

10 Years

NA

 

15 Years

2.881%

 

30 Years

3.473%

GMAC Mortgage

10 Years

NA

 

15 Years

3.481%

 

30 Years

3.995%

*NA = Rates Not Available

Conversion of APR Rates in EAR (Effective Annual Rates)

Lender Title

Time to Maturity

APR

EAR

Lending Tree

10 Years

NA

NA

Lending Tree

15 Years

2.97%

3.01%

Lending Tree

30 Years

3.62%

3.68%

Quicken Loans

10 Years

NA

NA

Quicken Loans

15 Years

3.33%

3.38%

Quicken Loans

30 Years

4.04%

4.11%

Aim Loan

10 Years

NA

NA

Aim Loan

15 Years

3.09%

3.13%

Aim Loan

30 Years

3.80%

3.86%

Amerisave Mortgage

10 Years

NA

NA

Amerisave Mortgage

15 Years

2.88%

2.92%

Amerisave Mortgage

30 Years

3.47%

3.53%

GMAC Mortgage

10 Years

NA

NA

GMAC Mortgage

15 Years

3.48%

3.54%

GMAC Mortgage

30 Years

4.00%

4.07%

*NA = Rates Not Available

Analysis of Online Mortgage Rates based on Effective Annual Rate

This section presents an analysis of online mortgage rates that are offered by the online mortgage companies to its customers. Table presented below shows the comparative rate of each of the five listed companies based on mortgage loan offering year term. None of the company included in the analysis has been offering online mortgage loan for ten years term period. These loans are available for 3 years, 5 years, 7 years, 15 years, and 30 years duration.

Analysis of the data shows that Amerisave Mortgage is offering the cheapest rate for 15 Year mortgage. It is charging EAR of 2.92% from its borrowers, which is the minimum EAR rate among companies included in the analysis. Minimum EAR rate of 2.92% shows that borrowers taking 15 year mortgage loan from the Amerisave will pay minimum loan at the time of maturity. Amerisave is not offering 10 Year mortgage loan. Contrastingly, GMAC Mortgage is charging the most expensive online mortgage EAR rate from its borrowers, which stood at 3.54% for 15 years term period.

EAR rates comparison shows that rates offered by Amerisave for 15 Year mortgage are cheapest compare to other companies included in the comparison. Second lowest cheapest rate is being offered by the lending ...