- August 13, 2017
- Posted by: steve
- Category: mortgage rates
Yahoo and Bankrate are two of the most popular places to find mortgage rates. But what’s the deal behind rates advertised on these sites? Let’s take a look.
If you’re looking to find mortgage rates and use a mortgage calculator, chances are good that you’ll be checking Yahoo and Bankrate.
However, it’s important to understand the mortgage rates that are advertised on these sites, and how they calculate mortgage information.
What’s the deal with Yahoo and Bankrate’s rates? We’ll break it down with a detailed look at both sites and how they approach mortgages, so that you can use that information to your best advantage.
Yahoo and Bankrate: The Basics
First, let’s take a look at what each site’s function is and how it works so that you can understand the source that’s giving you your mortgage rates.
Bankrate is the most popular online aggregator of financial rates. This site posts articles about things like credit cards, mortgages, and insurance, which give objective and well-researched viewpoints about finance. It also publishes personal finance stories to help readers relate and make their own informed decisions.
Although the site also publishes articles with financial advice for its visitors, a major reason people head there is to find information on financial rates.
In 1976, Bankrate got its start as an in-print publication called the “Bank Rate Monitor.” Back then, it focused on giving information about the banking industry. The financial information and rate research it provided was not unlike what the website offers today.
In 1996, the newspaper launched its first online version. In the years since, the site has gone through many changes, finally becoming known for its use as a calculator of mortgage and other financial rates.
Now, the website provides rate information to visitors for free, drawing from more than 4,800 institutions to get the numbers on over 300 different financial products. In addition to mortgages, some of those products include car loans, home loans, online banking, and credit cards.
Yahoo is a provider of online services that is well-known as a search engine and email provider. The site was founded in 1994 as a directory of other sites.
Yahoo grew quickly, spending some times as the most popular search engine on the internet. Over the years, it has added other site offerings, including Yahoo Finance.
Yahoo Finance falls under the site’s content provider umbrella, along with Yahoo Sports, Yahoo Movies, and Yahoo News. This branch of the site offers news and information about that topic – so the Finance site provides informational financial articles to help readers make the best-informed decisions.
Some of its posted stories are original, while others are “partner content” posted from other websites (Bankrate is actually one of those sites). The site offers a pretty comprehensive look at the financial world, as it tries to be a one-stop shop for readers’ financial needs.
On the homepage, news about finance and related events dominates the screen, as well as things like bond yields and exchange rates. It is one of the more popular financial websites out there, because it offers so much information in one place.
In addition to all of this information, Yahoo Finance also offers a mortgage calculator. Like the Bankrate version, this allows users to input their information and get the answers they need, using information from a variety of financial sources that Yahoo aggregates.
What is a Mortgage Calculator?
A mortgage calculator is a way to measure what your monthly mortgage payment would be depending on a variety of variables.
To use a mortgage calculator, you would enter your loan amount, term, and interest rate into the calculator. Then, it gives you a number for the right monthly mortgage payment for those variables.
If you’re looking for the right home loan, or hoping to refinance your existing one, these calculators make it easy to make an informed decision.
You can sometimes factor in other variables, too. Add in property tax values, insurance costs, or extra payments to get a different picture of the possible mortgage rates.
How Do I Use a Mortgage Payment Calculator?
Whether you’re on Yahoo Finance or Bankrate, the uses for the calculators are essentially the same. A mortgage calculator lets you know how much you would be paying per month for a given home, so you can make your home buying decisions based on a realistic sense of budget.
What else can you use a mortgage payment calculator for? There are a number of questions that these tools can help you answer.
1. Decide Whether You Need an Adjustable-Rate Mortgage
An adjustable-rate mortgage (ARM) has a lower interest rate than that of a fixed-rate mortgage. This can let you make a lower mortgage payment, while still getting the house of your dreams.
However, it’s possible that your ARM can suddenly get very high when the interest rate adjusts. A mortgage calculator can help you see how those interest rates will change your mortgage amount, so you can plan ahead accordingly.
2. What To Do About Private Mortgage Insurance Payments
If you don’t have a downpayment of 20%, you’ll likely be paying the additional cost of private mortgage insurance.
You get to stop paying the PMI fees when you owe less than 80% of your home’s total value. Either you pay down your loan until you reach this number, or your home appreciates in value until you do. Often, it’s a combination of both.
With a mortgage calculator, you can take a look at the value of your home and your mortgage amount, and calculate about when you will be able to stop making those PMI payments.
3. Consider Whether Refinancing is the Best Option
Refinancing to get a lower interest rate is generally ideal. However, there are some variables, including how much you owe and how much time is left on your mortgage, that can actually make refinancing the more expensive option.
A calculator can help you decide if refinancing is the right way to go or not.
4. Decide If You’ll Be Paying Your Mortgage Off Early
Many people dream of paying their mortgage off early. But can you really afford that?
A loan calculator lets you test out some answers to that question. See how much you could add to your monthly payment, and how soon that amount would let you pay off your home.
You can also look into changing your payment schedule, making slightly more frequent payments to pay off that loan sooner. Paying every two weeks, instead of once a month, can make a huge difference in how soon your loan is paid off, if you can afford to do so.
Sometimes, just seeing how much faster you can pay off the mortgage and how much you would safe gives you the motivation to take that extra step. Maybe you can cut back in other expenses in order to make paying off your home sooner a reality.
5. Know Whether to Rent or Buy
Ultimately, the question is whether buying a house is right for you right now. A mortgage calculator helps you make that decision wisely.
When you buy a house, it doesn’t just mean that your rent payment will magically become a mortgage payment. There are added costs involved, like insurance and property taxes.
A mortgage calculator helps you factor in all those different variables, so you can take a realistic look at how much you would really be spending to buy a house.
Yahoo’s Mortgage Calculator
Yahoo only recently added a mortgage calculator to its search function.
The built-in calculator will now pop up during Yahoo searches, and can also be found on its own page on the website.
This calculator has room for a lot of detail, like property tax percentages, insurance costs, home values, and ideal loan terms.
Bankrate’s Mortgage Calculator
Bankrate takes a slightly different approach, offering many different types of mortgage calculators on its site so you can choose the one that gives you the right information.
In addition to a regular mortgage calculator, they have a mortgage loan payment calculator, a mortgage payoff calculator, and a mortgage tax deduction calculator, among many others.
Other Mortgage Information
Calculators are not the only mortgage information that these sites have to offer.
Both sites offer details lists of different mortgage rates depending on different variables. Those rates change, and the sites update regularly with the new rates so that readers can always get the most accurate date.
Where Does the Information Come From?
Financial information sources get their data from market data vendors. When it comes to mortgage rates, those posted rates on Yahoo Finance and Bankrate often come from lenders that are paying the site to advertise them.
Not all of the lenders whose rates are shown are necessarily paying customers, but they often are. A major site is giving those lenders exposure in exchange for posting their rates publicly, along with their name.
On Bankrate, the advertiser listings are distinguished by having a “Next” button, which takes you to the advertiser’s website when you click it.
Should I Use Yahoo Finance or Bankrate?
Ultimately, there is no one clear choice that is better than the other.
Bankrate provides information that it obtains independently, for the most part. It has well-researched, detailed articles that strive to be objective.
However, if you see the name of mortgage lender or another financial company on the site, chances are good that that company paid to be there. The site clearly states this outright, so it is not a secret.
Yahoo Finance is more of an aggregator. Some of their information is independently obtained, but much of it comes from other financial sites, including Bankrate.
Your best bet is to explore multiple sites to get a feel for what information is out there. You may find a lot of overlapping information, but also some differences in what each site makes available.
When it comes to using the mortgage calculator, both sites have something to offer. Yahoo’s calculator is a little bit more basic, which can be good for getting a general picture of what your mortgage payments might look like.
Bankrate’s wide variety of calendars are great for when you have a more specific question, or are looking to test out different mortgage options. It’s helpful to do some mortgage research ahead of time, so you know what questions to ask.
Where Do Mortgage Rates Come From?
We know that most of the rates on these sites are advertised by lenders, but how to the lenders come up with those rates?
Mortgage rates change depending on the economy at the time. Every day, the rates are different. A look at the 10-year U.S. Treasury bond yield, for example, can give a good picture of whether mortgage rates are going to rise or fall.
That’s because, even though most mortgages are sold as 30-year products, most mortgages get paid off or refinanced in 10 years.
There are countless other factors that affect mortgage rates, and it’s not essential to understand them all. What’s most important is understanding what rate is best for you, based on what’s available.
What Can I Do With This Knowledge?
Once you’ve gotten a clear picture of the kind of mortgage and mortgage rates that are best for you, you can take the next step toward getting the right mortgage.
Information that’s offered on Yahoo Finance and Bankrate is great. However, that doesn’t mean that you need to get a mortgage through a company that advertises there.
Instead, use that advertised information to make your own decision, which could mean getting a mortgage elsewhere. Once you have used a calculator and done the research to know just how much house you can afford, it’s easy to make an informed mortgage decision.
If you’re ready to look into a mortgage, start by doing your research. The most successful home owners are the ones who put the time in to figure out what is affordable and sustainable for them when it comes to buying a home.
You’ll want to make sure you get the best mortgage for your budget.
When you’re ready to get that mortgage, we can help make the application process easy. Check out our options here and you’ll be well on your way to becoming an informed, successful homeowner.