LendingTree Reveals the Cities Where Borrowers Save the Most by Shopping Around for Mortgage Loans

LendingTree study analyzes the savings available by comparing mortgage rates across the country

Charlotte, NC – N.C., Oct. 17, 2018 (PRNewswire) LendingTree®, the nation’s leading online loan marketplace, today released its report on where borrowers can save the most by shopping around for mortgage loans.

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As interest rates rise, the amount of money consumers can save by shopping around and comparing offers can change. To help consumers understand how much they can save, LendingTree created a Mortgage Rate Competition Index that measures the basis point spread between high and low APRs offered to users through the LendingTree marketplace. This report uses that index to analyze the rate difference and dollar savings for the 50 largest metropolitan areas in the United States. Analysts review the same rate difference and savings on a national basis in the weekly Mortgage Rate Competition Index.

“If you are shopping for a home in San Francisco, taking the first mortgage offer you receive and not comparing it could cost you nearly $100,000 in interest over the life of your loan,” said Tendayi Kapfidze, Chief Economist at LendingTree. “In Cincinnati, it could cost you nearly $24,000. LendingTree, the nation’s leading online loan marketplace, allows consumers to shop around and compare mortgage offers, potentially saving them thousands of dollars.”

Key findings:

  • Homebuyers in Cincinnati and Houston had the biggest potential rate savings by comparing competing offers. Rates in Cincinnati had a range of 64 basis points, followed by Houston at 61, then San Antonio, Dallas, Phoenix and Chicago at 58.
  • Comparing mortgage offers before buying saved the most money in California. Large loan sizes fuel lifetime savings of $99,544 in San Francisco, $75,330 in San Diego and $72,557 in Los Angeles.
  • Significant savings for purchase borrowers in every city. The index ranges from 42 basis points in New Orleans to 64 in Cincinnati.
  • Monthly savings up to $279. For borrowers in San Francisco, a spread of 51 points translates into $279 a month, given the median home price of $900,000.
  • Even less expensive cities register meaningful savings. In Detroit, a low median home price of $150,000 and narrow spread of 45 points still adds up to $14,729 in lifetime interest savings.
  • Individual borrower results will vary. LendingTree’s method uses median values, so half of borrowers would see smaller savings. But, just as important, half could see larger savings. There is no way for a borrower to know where they fall in this spectrum without shopping around, so it is imperative to compare offers.

Where purchase borrowers face the largest differences in mortgage rates

Cincinnati
Purchase Mortgage Rate Competition Index:
0.64
With a median home price of $169,100, borrowers here could save $67 in monthly payments, adding up to $798 a year. Lifetime interest savings would be $23,672.

Houston
Purchase Mortgage Rate Competition Index:
0.61
With a median home price of $233,900, borrowers here could save $88 in monthly payments, adding up to $1,053 a year. Lifetime interest savings would be $31,217.

San Antonio
Purchase Mortgage Rate Competition Index:
0.58
With a median home price of $220,700, borrowers here could save $78 in monthly payments, adding up to $941 a year. Lifetime interest savings would be $27,918.

Where purchase borrowers could save the most in lifetime interest expense

San Francisco
Lifetime interest savings:
$99,544
An index of 0.51 and median home price of $900,000 adds up to savings of $280 in monthly payments, totaling $3,357 a year.

San Diego
Lifetime interest savings:
$75,330
An index of 0.57 and median home price of $607,000 adds up to savings of $212 in monthly payments, totaling $2,540 a year.

Los Angeles
Lifetime interest savings:
$72,558
An index of 0.56 and median home price of $595,100 adds up to savings of $204 in monthly payments, totaling $2,447 a year.

Where refinance borrowers face the largest differences in refinance mortgage rates

Bakersfield, Calif.
Refinance Mortgage Rate Competition Index:
0.81
With a median home price of $234,000, borrowers here could save $116 in monthly payments, adding up to $1,389 a year. Lifetime interest savings would be $41,163.

Oklahoma City
Refinance Mortgage Rate Competition Index:
0.72
With a median home price of $158,800, borrowers here could save $70 in monthly payments, adding up to $839 a year. Lifetime interest savings would be $24,893.

Detroit
Refinance Mortgage Rate Competition Index:
0.72
With a median home price of $150,000, borrowers here could save $66 in monthly payments, adding up to $788 a year. Lifetime interest savings would be $23,383.

To view the full report, click here.

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About LendingTree
LendingTree (NASDAQ: TREE) is the nation’s leading online marketplace that connects consumers with the choices they need to be confident in their financial decisions. LendingTree empowers consumers to shop for financial services the same way they would shop for airline tickets or hotel stays, comparing multiple offers from a nationwide network of over 500 partners in one simple search, and can choose the option that best fits their financial needs. Services include mortgage loans, mortgage refinances, auto loans, personal loans, business loans, student refinances, credit cards and more. Through the My LendingTree platform, consumers receive free credit scores, credit monitoring and recommendations to improve credit health. My LendingTree proactively compares consumers’ credit accounts against offers on our network, and notifies consumers when there is an opportunity to save money. In short, LendingTree’s purpose is to help simplify financial decisions for life’s meaningful moments through choice, education and support. LendingTree, LLC is a subsidiary of LendingTree, Inc. For more information, go to www.lendingtree.com, dial 800-555-TREE, like our Facebook page and/or follow us on Twitter @LendingTree.

Media Contact:
press@lendingtree.com

Loan Application Defect and Fraud Risk Drops as Home Purchases Take Higher Share of Mortgage Market

It’s likely that all of the investment in more digitized, automated, and efficient mortgage manufacturing and underwriting technology that’s been made in recent years is beginning to pay off, says Chief Economist Mark Fleming

Santa Clara, CA – June 28, 2018 (BUSINESS WIRE) First American Financial Corporation (NYSE: FAF), a leading global provider of title insurance, settlement services and risk solutions for real estate transactions, today released the First American Loan Application Defect Index for May 2018, which estimates the frequency of defects, fraudulence and misrepresentation in the information submitted in mortgage loan applications. The Defect Index reflects estimated mortgage loan defect rates over time, by geography and loan type. It is available as an interactive tool that can be tailored to showcase trends by category, including amortization type, lien position, loan purpose, property and transaction types, and can provide state- and market-specific comparisons of mortgage loan defect levels.

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May 2018 Loan Application Defect Index

  • The frequency of defects, fraudulence and misrepresentation in the information submitted in mortgage loan applications decreased by 2.4 percent compared with the previous month.
  • Compared with May 2017, the Defect Index decreased by 3.6 percent.
  • The Defect Index is down 21.6 percent from the high point of risk in October 2013.
  • The Defect Index for refinance transactions remained the same compared with the previous month, and is 4.4 percent higher than a year ago.
  • The Defect Index for purchase transactions decreased by 4.6 percent compared with the previous month, and is down 7.8 percent compared with a year ago.

Chief Economist Analysis: Despite the fact that market share for purchase transactions is increasing, we’re seeing a decrease in defect and fraud risk

“By now, everyone in the mortgage industry is aware that we are entering a market that will be dominated by purchase demand for the next several years,” said Mark Fleming, chief economist at First American. “According to the latest Mortgage Bankers Association forecast, refinance transactions will make up 28 percent of total mortgages originated in 2018 and is forecasted to drop to 23 percent by 2020. This is, of course, due to the current environment of increasing mortgage rates that follows years of persistently low rates. Until last month, the average rate for a 30-year fixed mortgage had remained below 4.5 percent for 80 consecutive months. And since most homeowners have benefited from the low-rate environment, they now have little financial incentive to refinance, or sell and buy again,” said Fleming. “With mortgage rates continuing to rise, the financial value of keeping their current low-rate mortgages is likely to increase.

“The silver lining? Despite the aforementioned obstacles, consumers will continue to buy. Richard Thaler, Nobel Prize-winning economist, is famous for the analogy that we are more like Homer Simpson than Spock when making economic decisions. Lifestyle decisions will still incentivize people to buy, and sometimes that beautiful kitchen is just too hard to resist! Again, according to the Mortgage Bankers Association forecast, the purchase market is expected to grow even as mortgage rates rise, largely on the strength of first-time homebuyer demand.

“With this fact in mind, the most important news in this month’s Loan Application Defect Index (LADI) is that the Defect Index for purchase transactions decreased by 4.6 percent compared with the previous month, is down 7.8 percent compared with a year ago, and has declined almost 10 percent in just the past five months. There’s no better time to have loan application misrepresentation, defect and fraud risk on purchase transactions on the decline than when the market share of purchase transactions is rising.

“It’s likely that all of the investment in more digitized, automated, and efficient mortgage manufacturing and underwriting technology that’s been made in recent years is beginning to pay off,” said Fleming. “Now the question is, how much lower will it go?”

May 2018 State Highlights

  • The five states with the greatest year-over-year increase in defect frequency are: Arkansas (+12.0 percent), Wyoming (+7.5 percent), New Mexico (+7.5 percent), California (+5.2 percent) and Virginia (+5.2 percent).
  • The five states with the greatest year-over-year decrease in defect frequency are: South Carolina (-20.4 percent), Alabama (-17.2 percent), Vermont (-15.3 percent), Minnesota (-14.9 percent) and Louisiana (-14.0 percent).

May 2018 Local Market Highlights

  • Among the largest 50 Core Based Statistical Areas (CBSAs), the five markets with the greatest year-over-year increase in defect frequency are: Virginia Beach, Va. (+20.0 percent), Los Angeles (+15.9 percent), Orlando, Fla. (+13.4 percent), San Diego (+12.7 percent) and Memphis, Tenn. (+8.0 percent).
  • Among the largest 50 Core Based Statistical Areas (CBSAs), the five markets with the largest year-over-year decrease in defect frequency are: Birmingham, Ala. (-22.4 percent), Austin, Texas (-19.3 percent), Pittsburgh (-16.7 percent), Raleigh, N.C. (-16.3 percent) and Minneapolis (-16.3 percent).

Next Release

The next release of the First American Loan Application Defect Index will take place the week of July 29, 2018.

Methodology

The methodology statement for the First American Loan Application Defect Index is available at www.firstam.com.

Disclaimer

Opinions, estimates, forecasts and other views contained in this page are those of First American’s chief economist, do not necessarily represent the views of First American or its management, should not be construed as indicating First American’s business prospects or expected results, and are subject to change without notice. Although the First American Economics team attempts to provide reliable, useful information, it does not guarantee that the information is accurate, current or suitable for any particular purpose. © 2018 by First American. Information from this page may be used with proper attribution.

About First American

First American Financial Corporation (NYSE: FAF) is a leading provider of title insurance, settlement services and risk solutions for real estate transactions that traces its heritage back to 1889. First American also provides title plant management services; title and other real property records and images; valuation products and services; home warranty products; property and casualty insurance; and banking, trust and wealth management services. With total revenue of $5.8 billion in 2017, the company offers its products and services directly and through its agents throughout the United States and abroad. In 2018, First American was named to the Fortune 100 Best Companies to Work For® list for the third consecutive year. More information about the company can be found at www.firstam.com.

Contacts

Media Contact:
First American Financial Corporation
Marcus Ginnaty
Corporate Communications
(714) 250-3298

Impossible Goal of Homeownership May Be Possible Despite Student Loan Debt, Says Ameritech Financial

Rohnert Park, CA – June 13, 2018 (PRNewswire) Student loan debt is a significant factor restraining millennials from the home buying market, according to recent research. Analysis by the Federal Reserve Bank of New York indicates that student loan debt decreased homeownership among those between the ages of 28 and 30 from 2007 to 2015. Further, the study suggests that if student debt levels had remained equal to 2001, more than 360,000 people in that age group would have owned a home in 2015. Hundreds of thousands of Americans have delayed buying a home due to their inability to move forward in the face of the ceaseless headwind of student loan debt. Ameritech Financial is a document preparation company that assists federal student loan borrowers with applications for income-driven repayment plans offered by the Department of Education that can help borrowers prepare for the home buying process.

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“It can feel like student loans are holding you back from financial freedom, up to and including homeownership,” said Tom Knickerbocker, executive vice president of Ameritech Financial. “We recommend that borrowers examine their current financial position and their goals and look for strategies such as eligibility for help through a federal repayment program.”

Though student debt is considered a major factor, other circumstances influence reduced homeownership for young Americans such as stricter mortgage underwriting standards and migration toward cities where home prices have soared as wages have stagnated. Despite this, college is still a relatively good foundation on which to build homeownership. According to the New York Fed analysis, almost half of those who attended college owned a home by the age of 33, compared to about a quarter of people who didn’t attend college.

Income-driven repayment plans (IDRs) can potentially lower loan payments, making it possible to be approved for a mortgage based on some factors crucial for homeownership, which include saving for a down payment, improving current credit score and reducing household debt payments relative to household income.

Ameritech Financial can assist borrowers in applying for federal loan assistance programs such as IDRs that can potentially lower their payments and get them on track for student loan forgiveness and make possible the seemingly impossible goal of homeownership. “Ameritech Financial is there to help individuals apply for programs with federal student loans. We offer our services to those seeking help in applying for income-driven repayment programs to help make sure their applications are completed properly,” said Knickerbocker.

About Ameritech Financial

Ameritech Financial is a private company located in Rohnert Park, California. Ameritech Financial has already helped thousands of consumers with financial analysis and student loan document preparation to apply for federal student loan repayment programs offered through the Department of Education.

Each Ameritech Financial telephone representative has received the Certified Student Loan Professional certification through the International Association of Professional Debt Arbitrators (IAPDA).

Ameritech Financial prides itself on its exceptional customer service.

Contact

To learn more about Ameritech Financial, please contact:

Ameritech Financial
5789 State Farm Drive #265
Rohnert Park, CA 94928
(800) 792-8621
media@ameritechfinancial.com