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Recent Upgrades to Our Calculator

Jul. 12th 2016

We recently made a number of upgrades to our homepage mortgage calculation tool.

Better JavaScript-Driven Charting Tools

For many years the chart on our site were powered by Flash. As popular as Flash once was, it caused many mobile browsers to crash. Steve Jobs shared his disdain for Flash in April of 2010.

Our initial solution to the support for Flash being limited to desktop devices was to not show charts to browsers which did not support Flash. We figured this to be a reasonable trade off because charts might take up too much space on smaller mobile devices.

In June Apple announced they would soon start blocking Flash on desktop devices as well.

Given how many home buyers use Apple devices we decided it made sense to upgrade our charts to shift away from Flash charts to JavaScript driven responsive charting. We found HighCharts to be the best solution for this implementation.

Here is what the old charts looked like

old charts.

Now instead of there being 3 smaller graphs across the page, the remaining balance and annual payments are shown on a single wider graph & users can click the link below that to view a donut graph of payment breakdown by source. The top graph also contains tool tips so a user can see what portion of each year’s payments go to principal vs interest and so on.

new charts.

expanded new charts.

Fewer Ads

Many publishers have responded to lower CPMs on mobile and the rise of ad blockers by adding more ad units, larger ad units & more invasive tracking to their pages.

Unblockable pop-ups, in-text ads, fly-in ads that move the text while you are trying to read it & auto-playing auto-generated video are just a few examples of the sort of stuff publishers are doing.

We have been approached by advertisers asking us to sell them a tracking pixel on the site…

I work in the mortgage industry and would like to discuss setting up an advertising partnership. I know it is possible to advertise to users directly on your website which I may be interested in, but I wanted to specifically ask if it would be possible for me to “rent” pixel space on your site.

I’m sure you’ve done this before, but I would specifically be asking to put a pixel on your website so that I could target your users other places on the internet outside of your website. I think the users of your site are similar to the users of my site, and the ability to target your users on other websites is something that I think could be valuable for my company.

Please know that I’m a serious ad buyer, and I spend 7 figures on advertising deals annually. If you would be open to me testing your users in this Retargeting trial, I would also be interested in buying ads directly on your site.

This test would be easy to set up, as I would just send a Google Retargeting Pixel to your webmaster who could implement it on the back-end. That’s it. I would then have the ability to target users of your website in other places and see if my ads resonate with them. I could be willing to pay you a monthly fee for this “pixel space.”

Thanks for your consideration!

…and we have universally refused these sorts of offers, as we view them as a violation of user trust. It is those sorts of backroom deals which have led to the rise of ad blockers.

We have taken a more sustainable user-friendly approach & reduced our ad load across the board. No page on our site has more than 2 ad units & the mobile version of our site only has a single ad unit.

Further, on the homepage and m. versions of our calculator users have the option of completely turning all ads off under the advanced settings menu which controls options like the display of amortization graphs.

Improvements to m. Version of Site

While both our regular homepage & the m. version of it use responsive web design features, on the m. version of the subdomain we also removed the ad unit which was near the calculation results so users can see the results faster on the small screen space mobile devices provide. We do not use any interstitial or anchor ads, to ensure the mobile experience is as fast and clean as possible.

We also disabled charts from appearing on the m. version, due to the constrained screen space, however a user can click the view desktop version of site to enable charting.

The m. version of the site still includes a mortgage rate table below the calculation results, so users can quickly see their current local market conditions, particularly in light of how BREXIT and other issues have rapidly moved US Treasury & mortgage rates.

Added Inputs for HOA & Home Insurance

Over the years we have had a number of requests to add the cost of insurance and HOA fees so buyers can see an “all-in” cost of ownership. We added these as input fields & made the calculation result output format more intuitive so people can quickly see their full monthly expenses while paying PMI & when PMI no longer required.

Perhaps the only major cost which our tool doesn’t currently account for is maintenance, but typically those expenses are lumpy and somewhat unpredictable. A good rule of thumb is 1% to 3% of the home purchase price, but this is a quite wide range & may be high for new homes while being low for older homes with major issues.

Further, mortgage interest deductions off income tax likely offset the maintenance costs for many home owners. There is always a trade off between the complexity of features in a tool & the usability of it. One way we offset some of these sorts of issues is for an input field like HOA we default it to zero & then on the results display we do not show HOA information if it is zero. Likewise if PMI payments are not required we do not show PMI info in the results.

Share This Calculation Result

Home purchases are typically the largest single investment most consumers make in their lifetime. Given this & the shift toward using mobile devices, we thought it made sense to make it easier for people to share calculation results.

On each calculation we create a short link which can be shared across the web or via mobile messaging applications.

This feature will help improve communications between partners (while someone is stuck at work, or such) & it will help agents sell more homes by making it easier for them to help their clients quickly see what is & is not affordable at a glance without any risks of miscommunications.

Features We Are Currently Thinking About

While we already have other calculators on our site which make it easy to compare the costs & benefits of refinancing, compare different loan term lengths side-by-sideprint out an amortization table & help users see the impact of extra payments, we will soon modify the homepage of our site to make the CSS print feature easier to use to print out the amortization tables it creates. Updated: we now have the printer-friendly version of the homepage live, and users can share this version of their calculation with other people just like the short-URL version of the homepage.

We are evaluating adding other options, but want to be careful not to ruin the flow of the homepage calculator. We may also test surfacing some of the other calculation tools on the homepage in areas other than the sidewide navigation, but will be careful not to cloud the clean user experience of the homepage.

Thanks for reading this and using our website!

Have any feedback on features you would like to see? Please share your comments below.

Posted by Adam | in news | No Comments »

 

Mortgage Lawsuits Spell Trouble for Lenders

Jan. 9th 2011

A recent spate of lawsuits has accused mortgage lenders of impropriety or outright fraud at virtually every level of the mortgage process. Moreover, as lenders increasingly find themselves on the losing end, these lawsuits will have important implications for the future of mortgage lending.

Bank of America is currently in the process of resolving all of the disputes surrounding Countrywide Financial, which it acquired during the height of the housing boom. In 2009, it was sued by the state of Massachusetts for originating risky loans without verifying borrowers’ ability to repay the loans. BofA ultimately settled the case in May 2010, and agreed to “$18 million in loan modifications for Massachusetts homeowners, $3 billion in loan modifications for homeowners across the country, and a $4.1 million payment to the Commonwealth.”

However, the Attorneys General from the states of Nevada and Arizona have already filed suit alleging that BofA has failed to live up this agreement, as it “told consumers they would not be foreclosed on while requests for loan modifications were under way, not acting on the modifications within a specific time, making false promises to consumers and potentially selling their homes while they were waiting for decisions.”

Last week, Bank of America finally settled its case with Freddie Mac and Fannie Mae, in which it agreed to repurchase a substantial portion of Countryide mortgage securities, and subsequently write down $2-5 Billion of it. Meanwhile, All State Insurance, which also lost money on investments in mortgage securities, and MBIA, which lost money insuring such securities, have also filed lawsuits. Both allege that BofA deviated from its underwriting standards when it originated such loans. Such claims are supported by an internal Countrywide audit, which found that “approximately 40% of the Bank’s reduced documentation loans . . . could potentially have income overstated by more than 10% and a significant percent of those loans would have income overstated by 50% or more.”

Meanwhile, the State Supreme Court of Massachusetts “affirmed a lower court judge’s ruling invalidating two mortgage foreclosure sales because U.S. Bancorp and Wells Fargo did not prove that they owned the mortgages at the time of foreclosure.” While there was no doubt – as in thousands of other cases – that the borrowers were in default, the lenders failed to convincingly establish proof of ownership at the time of foreclosure. These cases were closely watched by foreclosure defense attorneys around the country, and it is likely that additional cases will now be brought forward.

The upshot is that lenders are finally being held accountable for lax origination/documentation practices that were begun during the housing boom. As if it wasn’t already clear, their operations will continue to be the subject of rigorous scrutiny, and it’s possible that more lawsuits will be brought forward.

Posted by Adam | in foreclosures, news | 2 Comments »

 

Appraisals Continue to Affect Closings

Dec. 16th 2010

As if obtaining a mortgage loan wasn’t difficult enough, it turns out there was one more obstacle which has to be overcome: the appraisal. Thanks to new federal regulations, appraisals have now become a nail-biting experience. The best advice for both buyers and sellers is to avoid obtaining one altogether.

Unfortunately, all lenders will stipulate that an appraisal must be performed in order for the mortgage to be originated. During the inflation of the housing bubble, this was hardly an onerous requirement. Given that appraisal is inherently more art than science, it was easy enough for appraisers to adjust their comparison tables and deliver a value that was in line with what the buyer and seller had agreed upon. In fact, many appraisers reported receiving pressure from lenders to deliver a value (so that the sale would close), thereby minimizing the importance of their role in the process.

In some ways, this changed as a result of the Dodd-Frank financial reform bill and the related Home Valuation Code of Conduct (HVCC). Among other things, the independence of appraisers (such that they would be immune from third party pressure) was stipulated. This led to the creation of Appraisal Management Companies (AMCs), which has unfortunately led to a decrease in quality: “They mostly care about getting the appraisal done quickly and cheaply, not necessarily well. And they take a good chunk of the appraiser’s fee—often more than half—with the result that appraisers say they can no longer make a living; competent people are fleeing the profession.”

Moreover, appraisers still report being pressured from lenders – this time to deliver lower appraisals – “from lenders who want to make sure they have enough equity to cover them even if home prices fall further. As if this were not enough, a preponderance of short sales and foreclosures in some areas is making it difficult for appraisers to find comparable properties, and is putting downward pressure on both home values and appraisals. The news has been filled with horror stories of second and third appraisals that came in 10% (or more lower) than the first appraisal, making it difficult to complete the sale. According to the National Association of Realtors, “One in 10 member agents said they’d had a contract canceled as a result of a low appraisal, 13 percent said they’d had a contract delayed, and 16 percent said they’d had a contract negotiated to a lower sales price as a result of a low appraisal.”

In short, it’s probably best to avoid having an appraisal performed if you can help it. If the buyer and seller can agree on a price, it’s pointless to request the opinion of an appraisers unless it is ordered by the lender as a precondition to mortgage financing. If, on the other hand, you are stuck with an unpalatable appraisal, you should challenge the valuation and/or request a home inspection. If the appraiser isn’t willing to bend, you might be forced to find another appraiser.

Posted by Adam | in news | No Comments »

 

What You Need to Know about Option ARMs

Mar. 24th 2010
You’re probably wondering why I would be devoting an entire blog post to Option ARMs. After all, with the bursting of the housing bubble and the tightening of lending standards, such mortgages are all-but-impossible to obtain. During the height of the boom, however, they were extremely popular, and five years later, more than 1 million borrowers are still grappling with the consequences.
Option ARMs California and National 2010-2012
 
First, the basics: What is an Option ARM? Simply, it is an adjustable-rate mortgage that gives the borrower the option to choose how much he wants to pay each month. For this reason, they are often referred to as Pick-a-Payment loans. Typical Option ARMs offer four possible payments: fully amortized 15-year payment, fully amortized 30-year payments, an interest-only payment, or a lower minimum that doesn’t even cover the interest portion of the loan. Under this latter payment, the mortgage will amortize negatively, and the balance will increase over time.
 
There are a couple of features which make Option ARMs especially problematic. The first is that while the (minimum) monthly payment can only rise 7.5% per annum, it recasts every five years in order to make the loan fully amortizing. The result is known as “payment shock,” as the borrower is suddenly forced to make a much greater payment. The second feature is a limit to how long a borrower can continue to make the minimum payment. When the loan balance reaches 110%, for example, the borrower might be required to make the higher payment.
 
Option ARMs were initially only obtainable by relatively wealthy borrowers, especially those with irregular and/or seasonable incomes. In such cases, the flexibility associated with an Option ARM is a real benefit. In fact, Option ARMs can still be appropriate for those with very short time horizons (though not for speculators). During the housing boom, however, they were aggressively marketed to borrowers with promises of initial “teaser” rates as low as 1%, and claims that even by making the minimum payment, the value of the home would rise faster than the value of the loan. Other lenders used them as a basis for making larger loans to borrowers, since affordability ratios could be calculated against the minimum payment.
 
In 2005-2006, these loans accounted for 10% of all new mortgage issuance nationwide, and as much as 50% of mortgages in the most overheated areas, namely in Florida and California. Do the math: the first recast dates for such loans are five years later, or 2010-2011. Combined with the massive declines in housing prices, many borrowers will surely face some version of payment shock over the next couple years.
 
If this describes your situation, now is probably a good time to start talking to your lender, if you haven’t already done so. You might be able to obtain a loan modification. Otherwise, your best hope is for your lender to waive the $10,000 prepayment penalty that probably applies to your Option ARM and would otherwise kick in if you tried to refinance into a fixed-rate loan. Even if you have been making the fully-amortizing payment, you might want to consider refinancing, since variable rates could begin rising as soon as the end of this year.
 
If you’re in the market for a mortgage and your lender is still willing to offer you an Option ARM, I would think twice. Many borrowers assume they have the discipline to make the higher payment, but when push comes to shove each month, they opt for the negatively-amortizing minimum. If you’re determined to press ahead, shop around for the lowest margin (the spread that gets tacked on to a baseline index to determine your interest rate), and plan to make a fully-amortizing payment every month.
Posted by Adam | in financial planning, news | No Comments »

 

WP-Mortgage Calculator Widget / Plug in for WordPress

May. 13th 2008

We recently created a free Mortgage Calculator plugin that you can easily install in any WordPress blog in under 5 minutes!

How it works:
Hit the calculate button and see the results in real-time on your site. This helps you keep your site visitors focused on your site and your inventory – instead of sending them elsewhere.

If you look at the left sidebar of this blog you can see it in action, and here is an image of the calculator in use

Download WP-MortgageCalculator Now:
You can download WP-Mortgage Calculator here now! 🙂

Installation instruction for WP-MortgageCalculator:

This free calculator installs in the sidebar of your WordPress blog as a widget. The calculated results appear directly on your website, so you keep your readers engaged and active on your website!

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Step 1: Unzip the WP-Mortgage Calculator package and
put in it in your plugins folder located at
wp-content -> plugins

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Step 2: after unzipping the files upload them to your remote server using an FTP program.

The (4) files included in this package are
mc_calculate.php
mc_linktext.php
mortgage-calculator-logo.gif
mortgagecalculator.php

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Step 3: log in to your WP admin panel, located at
/wp-admin/

Click the plugins link, which will send you to
/wp-admin/plugins.php
and enable the Mortgage Calculator Widget.

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Step 4: For older versions of WordPress, inside the WP admin panel click on presentation. Then click on the Widgets sub-menu item. If you are using WordPress 2.5 you should click on Design then Widgets.

Drag the Mortgage Calculator and any other needed widgets (categories, archives, links, pages, etc.) into Sidebar 1.

Click “Save Changes” and your Mortgage Calculator should be live.

Can’t see widgets? Your WordPress theme may not be widget aware. To make it widget aware you need to ensure your theme has a functions.php file and that your sidebar is theme friendly. This Automattic page describes how to make themes widget friendly.

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Want an easier way to install a mortgage calculator on your site? Perhaps you could try using one of our other linking options – like posting HTML into one of your blog posts.

Have questions, comments, or feedback? Leave them below.

Thank you & enjoy!

Posted by Adam | in news | 2 Comments »