Assignemnt
• Find 5 different online mortgage lenders, such as this one.
• From these 5 lenders, find the following rates, assuming the mortgage payments are made monthly:
o 10-year (if available) for fixed-rate mortgage
o 15-year (if available) for fixed-rate mortgage
o 30-year for fixed-rate mortgage
• Convert these rates into effective annual rates (EARs).
• Discuss which rate is actually the cheapest rate.
o What are 2 things about the sample Web site given above that could be applicable to a consumer or investor?
o Present the rates in a table. List the quoted rate and EAR rate, the lender, and the maturity of the loan. Show your work for each calculation.
o What is 1 mistake people make when calculating their mortgage payments? Explain your answer.
o Based solely on the EAR, which rate is the cheapest? Does this make sense?
o Why do the different lenders have different rates?
o Is the difference in rates going to make a huge impact on the cost to the homebuyer? Explain your answer.