Jon love the site look at it all the time to see what the “best” (lowest) rate I could get. High level understand that it’s the price of rates that changes, but just now stumbling across these other tools you have to improve decision making on what would best for my situation. Wondering where I can find info on how to actually use this data to do so?
I’m glad you are enjoying http://LendZen.com and all the autonomy it gives you for exploring daily rates and your qualifications.
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Regarding your question about how to apply the index data to your own personal situation…
http://CompareLE.com is a good example of how the LendZen Index can be leveraged.
The only full-proof way to know who is offering you the best deal on a mortgage is to compare official Loan Estimates with matching criteria issued on the SAME DAY.
However, the price change calculated by the index can normalize estimates from different days to provide a comparison as if they were from the same day.
—
Likewise, you can apply this to your own estimates or benchmarks.
This is why the LendZen Index posts a basis points change, so you can calculate the dollar terms based on your own loan amount.
For instance, if you have an estimate from February 27 for a $500k loan, and the change in price is 211 basis points, you can assume that your estimate (regardless of the rate) is now $10,550 more expensive.
—
Because every rate has a unique relationship with a very specific set of MBS coupons, the change in MBS price affects each rate differently.
By monitoring a basket of MBS coupons and lender rate sheets, the index gives you the best broad base approach to understanding how your options have changed.
—
Using the “price of rates” is a more universal way for everyone to track their own situation.
Whereas, suggesting that some arbitrarily calculated average increased 0.50% won’t apply the same to all borrowers.
While things like credit score and LTV have a direct impact on how much each rate will cost at the time of the estimate, those “loan level price adjustments” don’t change when MBS pricing changes.
Therefore, the index can be used by anyone regardless of what qualifying parameters were used when the quote was first provided.
Jon love the site look at it all the time to see what the “best” (lowest) rate I could get. High level understand that it’s the price of rates that changes, but just now stumbling across these other tools you have to improve decision making on what would best for my situation. Wondering where I can find info on how to actually use this data to do so?
Hey Luke,
Thanks for your feedback.
I’m glad you are enjoying http://LendZen.com and all the autonomy it gives you for exploring daily rates and your qualifications.
—
Regarding your question about how to apply the index data to your own personal situation…
http://CompareLE.com is a good example of how the LendZen Index can be leveraged.
The only full-proof way to know who is offering you the best deal on a mortgage is to compare official Loan Estimates with matching criteria issued on the SAME DAY.
However, the price change calculated by the index can normalize estimates from different days to provide a comparison as if they were from the same day.
—
Likewise, you can apply this to your own estimates or benchmarks.
This is why the LendZen Index posts a basis points change, so you can calculate the dollar terms based on your own loan amount.
For instance, if you have an estimate from February 27 for a $500k loan, and the change in price is 211 basis points, you can assume that your estimate (regardless of the rate) is now $10,550 more expensive.
—
Because every rate has a unique relationship with a very specific set of MBS coupons, the change in MBS price affects each rate differently.
By monitoring a basket of MBS coupons and lender rate sheets, the index gives you the best broad base approach to understanding how your options have changed.
—
Using the “price of rates” is a more universal way for everyone to track their own situation.
Whereas, suggesting that some arbitrarily calculated average increased 0.50% won’t apply the same to all borrowers.
While things like credit score and LTV have a direct impact on how much each rate will cost at the time of the estimate, those “loan level price adjustments” don’t change when MBS pricing changes.
Therefore, the index can be used by anyone regardless of what qualifying parameters were used when the quote was first provided.