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Misleading Mortgage Advertising Scams
Misleading Mortgage Advertising Scams
Just search a little online and you'll find many advertisements as the ones you'll see below. Most mortgage companies feel that they have some kind of low payment offer to lure you in. Most of these "offers" are not financially sound loans or at least don't make much financial sense. 1.25% fixed for 5 years: There is no such thing. This is an advertisement for the option only arm. With this type of mortgage loan you have the option of have a fixed payment for 5 years. The interest rate will vary as soon as one month after you take out your mortgage loan. This is an adjustable rate mortgage. The average current rate on this program is over 7% right now. Even if this is the type of loan that you are searching for, steer clear of any company that is advertising in this manner. Don't expect a company that advertises this way to be upfront about any other aspect of this mortgage loan or any other mortgage loans that are offered. Many mortgage companies have lured many homeowners into this type of loan (Option Arm) by false advertisement and/or failing to disclose the disadvantages of this mortgage. Don't be fooled by this type of advertisement and don't work with any company that promotes this. Any mortgage company that has to mislead you to get you to apply is bad news. Get the all the facts on the option arm loan then read our page dedicated to the option arm mortgage. If you would like to apply for the option arm then start here. Low payment offers: Get a payment of X- dollars for Large loan amount. How can you get such a low payment? Is this real? In this type of marketing strategy, the answer is yes (if you qualify) but your answer should be no thanks. The most common and lowest payment comes from advertising the option arm mortgage which has a low payment but not low rate. Some mortgage companies are using 3 year or 5 year adjustable rate mortgages with a buy down to make the payment attractive. I'm Ok with mortgage companies that us using an adjustable rate program that allows for lower payments but I can't tolerate mortgage companies that use language that makes this loan appear better than what it is. Quicken Loan is advertising "Smart Choice" and shows you a low payment. At the bottom of the page, disclosures are required in which it says: 3 year adjustable rate with 1.75 points due at closing to give you a 5.5 rate with an APR at 6.70% based on a 150,000 loan amount. You don't have to be a mortgage expert to see that is not a smart choice. It does not make sense to pay high fees for a loan that you will have short term. Most people decide that they will refinance or move before the adjustable rate is set to change. If that is the case, will you recoup the $2,625.00 in points that you were charged? The answer is NO. Also, the loan is interest only, so you would owe that much in 3 years if you did not make extra monthly mortgage payments. Any mortgage company and or mortgage professional can put together this type of combination. As a mortgage search expert myself, I would never propose this type of loan to anyone. It does not make good financial sense. Your mortgage professional should be someone capable of structuring the best type of loan that makes good financial sense. Mortgage Search Experts are professionals at putting together the right loan programs and mortgage rates that benefit you the most. Low interest and or fee offers Low ball interest rate quotes happen quite too often and if your shopping your bound to run into it. This is done everywhere. Let's first address this issue on the internet, where your mortgage rate search may start. There are many web sites dedicated to interest rate postings by mortgage lenders and mortgage brokers. Unfortunately many mortgage companies are posting rates that simply don't exist. Next is the quote over the phone. Just because you talk to a live person doesn't mean that your getting an accurate quote. Work with an Mortgage Search Expert that considers all factors and compares real mortgage rates between 60 lenders to get you best mortgage loan at the best interest rate. Get the best mortgage quotes now at www.mortgagesearchexperts.com |
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