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I was pleasantly surprised that Rocket Mortgage (Formerly Quicken Loan) actually has a calculator on the dashboard when I view my loan information that shows me

I was pleasantly surprised that Rocket Mortgage (Formerly Quicken Loan) actually has a calculator on the dashboard when I view my loan information that shows me how much interest I'll pay over the lifetime of the loan. I can even change my monthly payments and see how it will effect the lifetime interest of my loan and how much faster I will pay it off.

thathndude 4y ago
Under federal law, when you get your credit card bill, the bank is required to include a breakdown of, for example, how long you have to pay if you only make the minimum payment, and how much your total payments will be if you only make the minimum payment. We need something similar and conspicuous for mortgages. Let people really see/feel the interest. Another way I’ve seen it phrased is in terms of buying power, and I think that can be effective. I’m ball parking some numbers here, but I think I saw something along the lines of, for the same monthly payment you can buy a $275,000 house with 5% interest or a $350,000 house at 3% interest. I think that drives the point a bit
- sokoloff 4y ago
  While I would not object to what you propose, I doubt it would change behavior significantly. People who are inclined to think about the interest and overall costs are already easily able to access that information. People who aren't inclined will see 3 additional pages among the 120 pages they see during closing or 30 they see during mortgage application/qualification process. People who can't (or don't want to) math aren't likely to suddenly do so because of an additional disclosure.
- cpwright 4y ago
  > We need something similar and conspicuous for mortgages. Let people really see/feel the interest. The disclosures you get from the lender are already required to contain a a "FINANCE CHARGE" which is the total interest you will pay on the loan, "The dollar amount the credit will cost you". They also have "TOTAL PAYMENTS", the "The amount you will have paid after you have made all payments as scheduled." The forms are formatted clearly. If you want to know what the number is, it is right there with an explanation.

thathndude 4y ago

Under federal law, when you get your credit card bill, the bank is required to include a breakdown of, for example, how long you have to pay if you only make the minimum payment, and how much your total payments will be if you only make the minimum payment. We need something similar and conspicuous for mortgages. Let people really see/feel the interest. Another way I’ve seen it phrased is in terms of buying power, and I think that can be effective. I’m ball parking some numbers here, but I think I saw something along the lines of, for the same monthly payment you can buy a $275,000 house with 5% interest or a $350,000 house at 3% interest. I think that drives the point a bit

sokoloff 4y ago
While I would not object to what you propose, I doubt it would change behavior significantly. People who are inclined to think about the interest and overall costs are already easily able to access that information. People who aren't inclined will see 3 additional pages among the 120 pages they see during closing or 30 they see during mortgage application/qualification process. People who can't (or don't want to) math aren't likely to suddenly do so because of an additional disclosure.
cpwright 4y ago
> We need something similar and conspicuous for mortgages. Let people really see/feel the interest. The disclosures you get from the lender are already required to contain a a "FINANCE CHARGE" which is the total interest you will pay on the loan, "The dollar amount the credit will cost you". They also have "TOTAL PAYMENTS", the "The amount you will have paid after you have made all payments as scheduled." The forms are formatted clearly. If you want to know what the number is, it is right there with an explanation.