Zillow has added a very useful feature to their Mortgage Marketplace. True Cost Calculation as described by Mary Miller:
When comparing mortgage quotes, most borrowers focus on two factors: interest rate and upfront fees. But it’s difficult to determine whether it makes more sense to choose a loan with a lower rate and higher fees, or a loan with higher fees and a lower rate. The best combination depends on how long borrowers will have the loan.
….Once they narrow down to a few quotes, they can check out the lender profiles, reviews, and ratings, and then select a couple of lenders to contact.
Consumers have a hard time understanding the real financial ramifications of a mortgage and most loan officers fail to get into the breadth and depth of the potential true cost of a given loan scenario based on the unknown variable of how long the loan may actually be held. Annual Percentage Rate, the antiquated, often manipulated, more often misunderstood measure of how much a loan will cost a borrower has been prime for replacement.
Zillow has effectively provided a cleaner method for consumers to determine real loan cost by quickly crunching the long math after the variable of ‘loan term’ is figured into the equation, allowing consumers the ability to evaluate a loan in hard dollars rather than ambiguous percentages. This tightens a major loophole in regards to the consumer experience on ZMM and should lead to higher conversions for the most competitive participating loan officers.
Well thought by the big Z…
