Buying a house? Why the mortgage rates online are deceptive.
For a few years now there have been many warnings (consumer reports) that warn the public about those companies who advertise mortgage rates online or in the newspapers and on billboards. They promise sensational mortgage rates. As wonderful as those rates are, they are deceptive to the majority of the public seeking home ownership.
The truth is that the process of in which you obtain a mortgage rate isn’t a cookie cutter process. Not for anyone.These advertisements give the false impression of the actual cost of home loans, and that sits on a fine line of violating federal law.
We do what is right, and avoid quoting a rate until we are sure you qualify for it. When we do quote it, you get the best rate in the market that you qualify for.
The Truth About Rates
Mortgage rates fluctuate. Many of these advertising low one percent rates fail to tell those seeking them that they do not stay at that rate. They go up after a period of time, and they go up substantially.
Every person does not qualify for these rates like these ads advertise. Each rate is based on the Consumer profile. This includes your credit score, debt ratio, and occupancy, the type of property, such as a single family home, a condo, and townhome. Also, the type of loan you are seeking. All of these greatly affect the rate you may receive.
Having a high credit score is great, but it does not necessarily guarantee the lowest rate either. If you have a considerable amount of debt, it brings the rate up. These ads and quick quote mortgage rates online tend to target the weaker scoring, low income, fixed income and minorities out there. There is a term for this. It’s called predatory lending.
What to watch out for?
Lenders will often contact you and try to rush you into making hasty decisions. Sell you a deal that may stretch you too thin with the promise of refinancing later when it may not be possible to do. Or they end up flipping you. Have repeated refinancing done that can actually suck the equity out of your home.
You could actually end up paying more than originally planned. Another thing they tend to do is leave out costs such as property taxes and insurance payments, doing this will make your payments seem lower. You do have to pay these costs regardless. So be sure to ask about this.
Mortgage rates online advertise the rates that a person with the best credit score and consumer profile might receive. Promising that everyone can get this kind of deal when in fact, they can’t. This is very much so, deceptive. So be smart and watch out for them.