I typically have CNBC on while I’m working. This morning, I watched in dismay as Diana Olick of CNBC used Bankrate to compare jumbo rates. What on earth was she thinking?
Bankrate does not have a sterling reputation for posting accurate mortgage rates. In fact, they settled a lawsuit from their advertisers (the mortgage companies who are listed at Bankrate’s site are paying to post rates) using bait and switch with the rates they are promoting.
I just visited Bankrate for a jumbo mortgage using 20% down in Seattle. Here’s an example of actual rate quotes I received priced at zero points/zero origination:
Lender 1: APR 8.017% – Rate: 8.000% – APR Fees: $815
Lender 2: APR 7.428% – Rate: 7.250% – APR Fees: $8740
Lender 3: APR 8.200% – Rate: 8.125% – APR Fees: $3500
Lender 4: APR 6.787% – Rate: 6.625% – APR Fees: $8278
Lender 5: APR 9.855% – Rate: 9.875% – APR Fees: $410
How can there be such a variance in rates that are priced at zero points and zero discount? Check out the closing costs shown as APR Fees…try telling me points aren’t factored somewhere in with Lenders 2 and 4. It’s misleading and this is similar to the example used on CNBC this morning. Worse, CNBC did not include the fees when they were showing the rates. Good drama, bad reporting.
The media is digging the mortgage crisis. They are sensationalist who thrive on bad news. Yes, we are in historic times with the mortgage industry. This is why it’s so important for consumers to select qualified mortgage professionals instead of the lowest rate on they believe they’ve found on the internet.