Publications

Central Banker | Fall 2007

FedFacts

Fed Offers New Online Mortgage Comparison Calculator

The Federal Reserve Board offers an online mortgage comparison calculator to help consumers make informed decisions when they shop for home loans. The calculator lets them compare monthly mortgage payments and equity accumulation for up to six types of mortgages, including 30- and 15-year fixed-rate mortgages, interest-only fixed-rate mortgages, adjustable-rate mortgages (ARMs), interest-only ARMs and payment-option ARMs.

To use the calculator, you need to compare at least one fixed-rate mortgage with at least one adjustable-rate mortgage. The calculator also includes a mortgage shopping worksheet, a glossary of mortgage terms and links to the Board's other consumer education resources on mortgages. The calculator is found at https://www.federalreserve.gov/apps/mortcalc/.

Agencies Offer Illustrations Describing Nontraditional Mortgage Products

As part of an ongoing effort to help educate the public on nontraditional mortgage products, federal bank, thrift and credit union regulatory agencies issued final illustrations earlier this year that explain the risks of those products. The illustrations are part of the 2006 Interagency Guidance on Nontraditional Mortgage Product Risks.
Institutions are not required to use these illustrations, but the representations can help consumers get clear and balanced information about nontraditional mortgages before choosing a product or selecting a payment option for an existing mortgage. Note that these illustrations are not pictures, but rather:

a narrative explanation of nontraditional mortgage products,
a chart comparing interest-only and payment option adjustable rate mortgages (ARMs) to a traditional fixed-rate loan, and
a table that could be included with monthly statements for a payment-option ARM, showing the impact of various payment options on the loan balance.

The illustrations can be downloaded from www.federalreserve.gov/boarddocs/press/bcreg/2007/20070531/attachment.pdf.