Comparing Fixed-Rate Mortgage Loans with Horizon-Specific Loan Payoff Schedules and Identical Net Loan Amounts.
Shopping for a mortgage and comparing the options is a very complicated topic because of the various types of mortgages and because of the large number of variables that should be considered. Ten years ago, Christine McClatchey and Cris de la Torre simplified the comparison process by introducing a loan payoff time horizon of 5 years. The current article attempts to further simplify the mortgage selection process by holding the loan size constant and eliminating their net loan size variable. Treating the loan size as a constant and adding in closing costs and points is another step toward easing the mortgage selection process using more realistic assumptions
Ambrose, Jan and Buch, Joshua, "Comparing Fixed-Rate Mortgage Loans with Horizon-Specific Loan Payoff Schedules and Identical Net Loan Amounts." (2016). Department of Finance. 29.