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How can I compare loan offers?
How can I compare loan offers? | Bankrate

How can I compare loan offers?

It's helpful to lay 2 or more Loan Estimates side by side and compare them page by page. But there's a shortcut to comparing loan offers: the 5-year cost.

Look at Page 3, the "Comparisons" section. It shows 2 numbers that cut through the clutter when you compare mortgage offers:

  • Total loan-related payments for the first 5 years: closing costs plus principal, interest and mortgage insurance that you'll pay in the first 60 months. The lower, the better.
  • Principal paid off in the first 5 years. The higher, the better, because the more principal you pay off, the faster you gain equity.

The "Comparisons" section has 2 other numbers:

  • Annual percentage rate, or APR. The lower, the better.
  • Total interest percentage, or TIP. The lower, the better.

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