I mentioned in this morning’s post that interest rates are low.   Google has a Mortgage Comparison search engine which is interesting, if not somewhat misleading.  Note that the image does not mention ads but the url is: https://www.google.com/comparisonads/mortgages. I’ve found it listed as both a sponsored link and a separated result between the sponsored and organic results.  I am not a fan of Internet mortgage companies and we do usually advise our clients to work with a local bank or mortgage broker [Prudential Northwest Properties owns Columbia Mortgage].  The results are instructive though.

All other things being equal, the change in payment between a loan at 4.75% and 5.25% is $91.62 per month on a $300,000 (30 year fixed) loan.  According to the Google Comparison this is what happens with interest rates as credit scores change:

• Excellent (740-850)- Lowest rate (not APR) of 14 lenders: 4.625%
• Very Good (700-739)- Lowest rate (not APR) of 14 lenders: 4.75%
• Good (660-699)- Lowest rate (not APR) of 14 lenders: 4.75%
• Fair (620-659)- Lowest rate (not APR) of 7 lenders: 4.75%
• Poor (580-619)- No lenders quote

THIS IS THE IMPORTANT PART:

Though it appears that your credit score doesn’t impact mortgages; it does:

• Excellent (740-850)- APR range of 14 lenders: 4.851% – 5.283%
• Very Good (700-739)- APR range) of 14 lenders: 4.964% – 5.295%
• Good (660-699)- APR range of 14 lenders: 5.184% – 5.721%
• Fair (620-659)- APR range) of 7 lenders: 5.198% – 5.621%
• Poor (580-619)- No lenders quote

All of the above comparisons are quoted from the Google Mortgage Comparison using $360,000 with 20% down in Oregon for 30 year fixed loans including FHA with up to 1 point in fees (by switching to 4 points, I can get a quoted rate as low as 4.25%).  The quoted rate is just that, a quoted rate.  The APR is designed to show the true cost of the loan with lender fees and origination points.  There are no brick-and-mortar banks that I recognize in any of the quotes and the banks listed are paying to be there, not a result of Google crawling for interest rates.

Just one more reason for buyer beware.