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Internet Mortgage Shoppers Beware
Consumers seeking a mortgage for refinance, purchase, or investment need to be aware of the traps and pitfalls on the internet.
Pembroke Pines, FL (PRWEB) August 6, 2006 -- We all know the warning “Buyer Beware.” The problem is that many of us still fall prey to bait and switch style tactics when looking for a mortgage, even when posted on a believably respectable website such as Bankrate.
Bankrate, the “gorilla” of online home loan rates, draws millions of visitors, promising to give a listing of companies and their rate and cost offerings for mortgage loans, and even passes that information on to America’s largest newspapers as fact. It proclaims itself to be a tool for the consumer, delivering information and advice. But as many reputable mortgage lenders have known, consumers are really finding a different reality at Bankrate.
A lawsuit is being prepared against Bankrate after hundreds of consumers complained about lenders who failed to deliver on the rates and terms they promised on the website. One lender actually told a Bankrate employee that the consumer would need a “direct line to God” in order to qualify for the rates and terms they advertise on the site. Why would a lender post rates and terms they are unwilling or unable to honor? They want to lure consumers who truly want to believe that they are getting an interest rate or cost package that is significantly lower than the competition. The problem is the consumer rarely is made aware they are not getting the promised package until they have wasted enough valuable time that they feel stuck to use whatever the lender delivers.
There are real reasons the terms could change midstream, and when working with a reputable lender, generally the change is caused by something changing from what was submitted on the loan application. Some examples are a change in credit, income, employment, debts, or assets.
Are there reputable lenders on Bankrate? Yes, absolutely. And some of those lenders are the ones who prompted the lawsuit. They were posting real interest rates and terms they could honor, but they could see consumers being lured to the less-reputable lenders. And the consumer usually would not find out until it was too late. Mortgage lenders get their money essentially from the same places - so anytime there is a huge difference between quotes on identical programs, it pays to ask some questions. This also goes for TV ads as there are some that offer really low rates, but the “fine print” shows you are paying a lot of points.
The bottom line is that the internet can be a great place to gain basic trends and information about a home loan, but the Bankrate lawsuit illustrates the need to work with a Trusted Advisor. A home loan is generally the largest financial transaction of your entire life, so working with a real professional who can advise you on correct strategies and programs for your unique needs is a must. And, like your mom and dad always said - you get what you pay for, and solid advice from a real professional may cost more than a bargain basement operation.
Most importantly, remember that the absolute lowest rate and terms on the wrong financial strategy or loan program for your life will prove far more costly than a competitive rate package on the RIGHT strategy, which correctly integrates your mortgage into your overall financial plan.
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