From the “I heard it so it must be true” file, I was under the impression that Oregon mortgage rates were usually lower than the national average. I did a search on www.bankrate.com for a 30 year mortgage, zero points, 20% down. I used the APR as the rate as that should allow for the most equal comparison of loans (correct me if I am wrong).
NYC, NY: 6.241%
San Diego: 6.148%
Dallas, TX: 6.148%
So we can probably consider this myth “Busted.”
All the 6.148% loans are through American Interbanc Mortgage, LLC. Equally interesting is their bold print homepage:
NOTICE TO OUR COMPETITORS:
It may have been different in the past when there were more regional banks, but other than Umqua, I can’t think of a regional bank that’s native to this region anymore. Now banking and mortgages are pretty-much a national thing and are becoming more of an international thing.
BTW: I wonder how realistic the 6.148% rate is? Do you need to have a 0 DTI, put 20% down and have an 800+ FICO to get that one?
Published rate versus Real Rate
I think it should be noted that the system of publishing rates promotes a game of the “biggest lie.” I think we have all heard stories, especially in today’s news environment, that people didn’t get the deal on the mortgage that was initially suggested to them. The deal ‘magically’ shifted at closing.
The other thing that should be noted is that while those fictitious rates do not vary by geography, they do vary greatly by individual borrower. Furthermore, since we cannot tell a lie from the truth, there is little way to compare individual rates based on mass data gathered from different geographic locations. It might be interesting to look at a random sample of mortgage instruments as recorded, but then we have the problem of the size of the loans. There are also differences in median prices, and so on. I think it is interesting that we have one federal tax code, but the cost of housing varies quite a bit from one part of the country to the next. To demonstrate, I think there is little disputing that the cost of housing in Detroit, Michigan is much different than much of major population centers in California.
In any event, I have just ordered a copy of “Mortgage Ripoffs and Money Savers: An Industry Insider Explains How to Save Thousands on Your Mortgage or Re-Fi” by Carolyn Warren. Amazon.com customers rate it 5/5 star after 24 customer reviews. There are not that many books that have the first 24 customers rate it 5/5, so I hope it really is as good as the readers suggest.