Neighborhood Loans Mortgage Interest Rate and Cost Review

Is Neighborhood Loans a cheap or expensive mortgage lender? We compare the interest rates and closing costs charged by Neighborhood Loans with other lenders for comparable mortgages. Nationally, here is what we find:

Interest Ratesimilar to average (+0.08%)
Loan Related Closing Costshigher than average (+$427)
National Rate and Closing Cost Rating(3.0)

On average, Neighborhood Loans’s interest rates were similar to those of other lenders (+0.08%) for a comparable set of borrowers. Its average total loan related closing cost was higher than those of other lenders, with a difference of +$427. Overall, combining interest rates and closing costs we estimate that Neighborhood Loans tends to be an expensive lender, and give it a National Rate and Closing Costs Rating of 3.0 out of 5.0 stars.

Neighborhood Loans’s Rates by Area

Mortgage lenders often set different rates in different geographical markets. In particular, among the markets we track Neighborhood Loans was most active in:

  1. Chicago, IL
  2. Grand Rapids, MI
  3. Portage, MI
  4. Big Rapids, MI
  5. Valparaiso, IN

You can click through to check out Neighborhood Loans’s mortgage rate competitiveness by area. Or, for our data driven ranking of all the top mortgage lenders by area, click here.

Neighborhood Loans’s Rates by Mortgage Type

Mortgage lenders also tend to charge different interest rates and closing costs depending on the type of mortgage. In our data, Neighborhood Loans originated Conforming, FHA, USDA and VA mortgages for new home purchases. It also originated Conforming, FHA and VA mortgages for refinances. We breakdown its interest rate and total loan related closing cost difference relative to other lenders for comparable mortgages by type in the table below.

New Purchase MortgagesConformingFHAUSDAVA
Interest Rate Difference+0.13%+0.02%-0.02%+0.03%
Loan Related Closing Cost Difference+$683+$372-$54+$122
Cost Adjusted Rate Difference+0.20%+0.04%-0.03%+0.04%
Star Rating(2.5)(3.5)(3.5)(3.5)
Refinance MortgagesConformingFHAVA
Interest Rate Difference+0.05%+0.08%-0.00%
Loan Related Closing Cost Difference-$10-$195-$102
Cost Adjusted Rate Difference+0.05%+0.07%-0.01%
Star Rating(3.5)(3.0)(3.5)

As a summary, Neighborhood Loans is similar to other lenders for FHA, USDA and VA purchase mortgages. It is more expensive than other lenders for Conforming purchase mortgages. For refinancing mortgages, Neighborhood Loans is similar to other lenders for Conforming and VA mortgage refinance. It is more expensive than other lenders for FHA mortgage refinance. Nevertheless, individual circumstances can matter, and we always recommend shopping among several lenders in your area before signing.

Other information about Neighborhood Loans:

Registered name: Neighborhood Loans
Registered city and state: Downers Grove, IL, 60515
Regulator: United States Department of Housing and Urban Development (HUD)

* Source of the data is Federal Financial Institutions Examination Council (FFIEC) and is for mortgages originated in the past year. Our comparable mortgages analysis controls for Neighborhood Loans’s distribution of loan term (e.g. 30 year vs 15 year), loan-to-value (LTV), debt-to-income (DTI), loan amount, loan program (e.g. Conforming/FHA), loan purpose (e.g. purchase/refinance), and commuting zone. Cost adjusted rates were computed based on each percent of the loan amount in above average loan related closing costs being worth +0.15 of a percentage point in interest rate. Furthermore, the amounts are regularized using a Bayesian approach to control for small samples.