Buyer Beware! Mortgage Companies Can Quote Anything

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Filed under: Market Comentary

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Last week I was talking about how rates have dropped, and I wanted to follow up on that topic to expand a little more. It’s exciting to see the dip in interest rates. What’s happening now is there is an uptick in marketing from mortgage companies promoting home refinances.

Bait and Switch in the Mortgage Industry

If there’s an opportunity to help our clients save money, then we need to offer the best deals that are available. But I’ve talked to at least three people in the last week who brought me details about potential refinancing options. They ask my opinion and I tell them that they should definitely lock the excellent rate.

Unfortunately, more often than not, the client moves forward to lock in the rate only to find out that the other lender really can’t offer the great rate. Instead, the lender is pushing you forward with different terms and a refinance that might not make the same economic sense as the original conversation.

Make sure to consider break-even points, cost savings, and how long you intend to own the house. Running these numbers will help you determine if it’s a good deal for your situation.

Buyer Beware

Before you rush into a home refinance that seems too good to be true, do your homework to learn more about the lender. Ask for referrals and talk to friends and family to see who they used. You need to find a lender that you can genuinely trust. That lender needs to be willing to walk away if they see that it isn’t the right deal for the benefit of your family.

Don’t let anyone convince you to change anything on your mortgage if it doesn’t make sense for your needs. I share this information as a public service announcement: not everyone needs to refinance their home. The same thing applies when you are buying a home. Watch out for lenders who are over-promising what they can’t deliver. This caution will ensure that you don’t run into problems when it’s time to close on the property.

Do you need another opinion about the right solutions for your home mortgage? I’m here to answer your questions. Please like, share, and comment to warn your friends about this issue.

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