CHARLOTTE, N.C., Nov. 20, 2017 /PRNewswire/ -- LendingTree®,
the nation's leading online loan marketplace, today released its
first monthly Mortgage Offers Report which analyzes data from
actual loan terms offered to borrowers on LendingTree.com by
lenders on LendingTree's network. The purpose of the report is to
empower consumers by providing additional information on how their
credit profile affects their loan prospects.
- October's best loan offers for borrowers with the best profiles
had an average APR of 3.75% for purchase and 3.70% for refinance,
on conforming 30-year loans. Mortgage rates vary dependent upon
parameters including credit score, loan-to-value, income and
property type.
- For the average borrower, purchase APRs for conforming 30-yr
fixed loans offered on LendingTree's platform were down 3 bps month
over month, to 4.31%, the lowest since November 2016. In contrast, the loan note rate of
4.18% was up 7 bps to the highest since July. The report references
APR as opposed to interest rate, as lenders often make changes to
other fees in response to the interest rate environment.
- Consumers with the highest credit scores (760+) saw an average
APR offer of 4.18% vs 4.44% for consumers with scores of 680-719.
The APR spread of 22 bps between these score ranges was 1 bps lower
than in September. The spread represents nearly $12,600 in additional costs for borrowers with
lower credit scores over 30-years for the average purchase loan
amount of $228,730. Additional costs
are due to higher interest rates, larger fees or a combination of
the two.
- Refinance APRs for conforming 30-yr fixed loans were up 10 bps
to 4.26%. The credit score bracket spread widened to 16bps from 15
bps, nearly $7,500 in extra costs
over the life of the loan for lower credit score borrowers given an
average refinance loan of $235,844.
- The average proposed down payment for purchase mortgages have
been rising for 7 months and reached $59,680 in October.
- Average monthly payments were little changed at just over
$1,100 for both purchase and
refinance. The credit score bucket spread was $241 for purchase and just $77 for refinance.
*Some borrowers make a down payment when refinancing to bring
their LTV to a targeted value.
"Our report illustrates the impact a credit score can have on a
borrower in very tangible terms," said Tendayi Kapfidze,
LendingTree's Chief Economist and report author. "As much as people
obsess over credit scores, many think of its importance in the
binary "approve/decline" paradigm. Few borrowers could actually
tell you how the credit score impacts the cost of financial
products. We hope this report increases consumer education in this
regard."
Kapfidze added, "As we move closer to December, there are
a few catalysts for interest rate risk. First, the FOMC is
almost certain to raise the benchmark interest rate on December
13. Secondly, progress or lack of progress on the tax plan
could create volatility. And lastly, Congress must pass a spending
bill or short-term continuing resolution by December 8th or we run the risk of a
government shutdown, which could push interest rates up further.
For those who are considering a refinance or looking to finance a
home purchase, consumers should consider locking in an interest
rate at today's levels to avoid the risk and costs associated with
rising interest rates."
About the Report
The LendingTree Mortgage Offers Report contains data from actual
loan terms offered to borrowers on LendingTree.com by lenders.
LendingTree believes this is an important addition to standard
industry surveys and reports on mortgage rates. Most quoted
industry rates are for a hypothetical borrower with prime credit
who makes a 20% down payment. Most borrowers do not fit this
profile. LendingTree's Mortgage Offer report includes the average
quoted APR by credit score, together with the average down payment
and other metrics described below. We stratify by credit score, so
borrowers have added information on how their credit profile
affects their loan prospects. The report covers conforming 30-yr
fixed loans for both purchase and refinance.
- Loan Distribution: The share of loans offered by credit score
bucket
- APR: Actual APR offers to borrowers on our platform
- Down Payment: Though analogous to the LTV, we find that
borrowers identify more closely with the down payment. Academic
studies have also found that the down payment is the primary
concern for homebuyers and one of the main impediments to entering
the homebuying market.
- LTV: Actual LTV offered to borrowers on our platform
- Loan Amount: The average loan amount borrowers are offered
- Monthly Payment: Another key figure that borrowers have top of
mind when shopping for loans
To view original report visit:
https://www.lendingtree.com/home/lendingtree-mortgage-offers-report-october-2017/
About LendingTree
LendingTree (NASDAQ: TREE) is the nation's leading online loan
marketplace, empowering consumers as they comparison-shop across a
full suite of loan and credit-based offerings. LendingTree
provides an online marketplace which connects consumers with
multiple lenders that compete for their business, as well as an
array of online tools and information to help consumers find the
best loan. Since inception, LendingTree has facilitated more than
65 million loan requests. LendingTree provides free monthly credit
scores through My LendingTree and access to its network of over 500
lenders offering home loans, personal loans, credit cards, student
loans, business loans, home equity loans/lines of credit, auto
loans and more. 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:
Megan Greuling
704-943-8208
Megan.greuling@tree.com
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SOURCE LendingTree