Zillow Mortgage Marketplace Adds “True Cost” to Loan Quotes

Posted by Bill Rice
July 23, 2009

As Mary Miller, Zillow’s Director of Product Management, states in her blog post–mortgage shoppers are very focused on mortgage rates and closing fees. However, we all know those can be deceptive and depending on your plan for the home you are purchasing or refinancing, very misleading.

Mary explains the value of this concept very nicely:

When comparing mortgage quotes, most borrowers focus on two factors: interest rate and upfront fees. But it’s difficult to determine whether it makes more sense to choose a loan with a lower rate and higher fees, or a loan with higher fees and a lower rate. The best combination depends on how long borrowers will have the loan.

Great new feature for the consumer.

However, I think it would be even more powerful if the mortgage broker or lender got the goal in the anonymous loan request. Most mortgage brokers are well trained at structuring mortgage loans that meet homeowners and new home buyer needs. It would be ashamed to put them in a competitive guessing game on their quotes.

Another nice move by Zillow in the mortgage loan marketplace.

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  • Mary Miller
    Hi Bill, Thanks for the nice compliment on our new True Cost feature. I want to let you know that we do ask borrowers how long they plan to stay in the home on the initial loan request, and this information is provided to lenders. The new True Cost feature enables borrowers to change those years once they get quotes back, so they can compare across quotes and see how the costs change for different timeframes. This helps borowers weigh the risk if they aren't quite sure how long they will keep the loan. For many of us, plans change over time. This tool provides a way for borrowers to see what they will pay in many different "what if" scenarios.
  • Excellent! I think it is a great idea. Also helps focus the consumer where they should be focusing--goals and outcomes.

    Thanks for the comment!
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