Articles About Finance And Refinancing

Spotting Dubious Online Mortgage Ads

There's no question the mortgage industry has changed dramatically since the beginning of 2007. Subprime mortgages are now as rare as gold, and credit requirements have become much stricter. Alt-A mortgages too are hard to come by. Many large mortgage providers have seen profits markedly down, and some have even closed their doors. And sadly, a lot of homeowners are now struggling to pay their adjustable-rate mortgages and keep their homes.

But no matter how much an environment changes, some things stay the same. Those outrageous advertisements offering unbelievable home loans are still being used by a minority of mortgages companies to draw in new customers, even as their previous customers are being foreclosed on because they were sold a loan they didn't expect or understand.

The Ad Constant

Such ads are rarer than they were a year ago, because quite a few of the companies which depended on them for bringing in new business have moved on to more profitable industries or simply shut up shop. But they can still be found, lurking on websites big and small, and tempting desperate homeowners into taking the bait.

Fortunately, such ads are usually easy to detect. Many use interest rates or monthly payment amounts to snare and impress readers who might otherwise see little gain from such a product. More importantly, these ads use numbers which are ridiculously agreeable, and at face value seem to include very few requirements.

Warning Signs

But promises of a $500,000 mortgage for a few hundred dollars a month should have you running the other way. Why? Because these kinds of loans are invariably driven by adjustable rates, depend on an astonishingly low teaser rate, and will result in a huge jump in minimum monthly payments once that teaser rate has expired after a year or two.

One way people determine whether an ad is shady or not is to scan for fine-print at the bottom of the promotional message. The assumption is that if there's a lot of tiny conditional text there are catches, whereas no or very little fine-print means an honest deal.

But this assumption is seriously flawed. The nuances of advertising regulations allow advertisers to side-step the traditional checks and balances many people are used to. Look carefully at a mortgage advert on the web and you might see minimal fine-print like "some restrictions apply". But the exact details of those restrictions aren't given, at least not on the same page where the ad appears. Instead they're buried at the bottom of the target page - the page you are taken to once you click on the advert itself.

Additionally, the final fine-print might not deal with the technical details of the loan as you would hope. Some only cover aspects like teaser rates and prepayment penalties in a vague and noncommittal way. Others don't mention them at all.

One other important development in mortgage advertising is the use of the term "fixed rate". Since the subprime shakeout, adjustable rate mortgages have become vilified and viewed as dangerous by many. Sometimes this reputation is unjust. But regardless, it has posed a problem to deceptive advertisers. Their solution has been to bend the truth about the product they're offering and substitute "adjustable" for "fixed". In their eyes the mortgage is fixed because the payments won't change for the first year or so that the teaser rate is in place. But they deliberately don't acknowledge that after the teaser rate has expired the payments will start shifting, often upwards.

New Trends, Same Old Risks

As the mortgage market has stuttered, law makers and industry leaders have stepped in to curb bad business practices. Teaser rates and prepayment penalties, which have been the undoing of many unsuspecting homeowners, are now frowned upon. And reports of dubious mortgage origination practices like exaggerated income statements or bait-and-switch offers are rigorously investigated.

Some argue that given these developments such questionable practices must no longer be possible. But sadly, they are. No matter how the mortgage climate changes there will always be companies who choose to use advertising in questionable ways. Worse still are the unscrupulous small-time opportunists who try to fly below the radar, or who operate to make a quick buck from unsuspecting customers and then slink away into the night.

Companies like America's Lending Partners have tackled the problem of dubious ads head-on by trying to educate consumers that some mortgage ads can be harmful to their financial health. They placed an ad on their home page promising a $490,000 mortgage for only $99 per month. But when someone clicks on that ad they are told "Don't Believe Everything You Read!", and are warned as to the dangerous nature of such promotions. The strategy has yielded some interesting calls into their customer service department from small-time brokers and loan officers who had hoped to ensnare unsuspecting homeowners with an obviously toxic mortgage.

Conclusion

When shopping for something as major as a home loan it's important you approach the process methodically. When it comes to advertising, don't jump at numbers or be sold by a flashy message alone. Look at the fine-print and check the credentials of the company making the offer. Educate yourself and do your research. The time invested will probably save you thousands of dollars down the road.

Andrew Carey works at America's Lending Partners, a leading online mortgage business that has been providing homeowners and home buyers with a variety of resources and mortgage services since 1999. For more information please visit: http://www.LendingPartners.com

Other Article Sites

findabook.com  moneycd.info  a-mortgage.info   about-lemon-laws.info  aboutstudentloans.info
all-about-publishing.info  auctions-articles.info  bestcollege-university.com  bestispconnection.com
biblefolder.com  blogger-website.com  books-used.info  brokers-guide.info  buywindows.info  cable-dsl.info
career-miner.com  carpel-tunnel.info  cashinaflash.info  cashloanreviews.info  casinobell.com  chat-house.info
clearmycredit.info  collegeloantips.info  crones.info  depression-articles.info   dirnic.net  dishguides.info
divers-below.com  expodog.info   financewizz.com  fire-insurance.info  getgood.info  handleit.net   it-idea.info
health-supplies.info  hosting-right.com  insidealert.com  insurance-facts.info  jobs-employment.info
justgood.info  lookgold.net   lowcost-travel.info  money-source.info  myhostzone.info  numisblog.com
peoplesearchfinder.info  pr-articles.info  realeas.com   refinancing-guides.info  spyware-remove.info
telelot.info  the-law.info   toppaid.info  travel-deals.info  travelcorrect.com  wedding-guide-site.com
your-blog.info  your-credit.info

MORE ARTICLES:

Refinancing Mortgage Loan - Get The Lowest Interest Rate You Can When Refinancing
Refinancing can be a very simple process. You fill out a few applications, take the best offer and you're done.

Credit Heaven Announces their Rate Busters Program to Slash Interest Rates for High Interest Loans and Credit Cards
The Rate Busters program is designed to achieve affordable and sustainable payments for borrowers by negotiating lower interest rates or periods of no interest on existing credit card, auto loans and mortgages. This in turn will maximize consumers' ability to reduce monthly payments, reduce debt, maintain or improve consumers' credit as well as reduce creditor's bad debt.

Refinancing Mortgage: Low Payment And Low Interest Rates
Those seeking a financial alternatives are often caught thinking that low payment refer to low interest rates. They should be aware that low interest rates vastly differ from low payment. With this in mind, they can veer away from dubious loan agents who will rush them to a new mortgage with high interest rates and add-on fees.

Mortgage Loans, Construction Loans, Refinancing Mortgage Rate
TheLoansStore.com was created with the interests of the consumer in mind. If you have ever wondered if owning your own home or refinancing your current home would be possible, dont wonder anymore. From new Construction Loans to Mortgages Loans, Bad Credit Home Loans and Refinancing Mortgage Rate. Whether you have great credit, marginal or bad credit, theLoansStore.com can help. We know one size never fits all borrowers.

Student Loan Financial Group Announces Interest Rates on Variable-rate Loans Increasing July 1st
Student can take advantage of the lower rate if they apply before June 30th.

High Interest Rates Mean Mortgage Refinancing According to GuideToLenders.com
Professional master of business administration (MBA) role models such as Kathy Giusti and Rich Fairbank provide mentorship and advice online through education sites like MBA-Business-Schools.com. Future and current MBA students can prosper from the wisdom of successful business professionals and boost their careers through invaluable learning tools and resources.

Auto Loans Low Interest Bad Credit: Car Loan without Credit Problem
Owning a car is apart from necessity enhances your status in the society as well. Driven by the urge due to either of the two reasons, you may wish to own a swanky car but are restrained by financial constraints. Going for loans is a good option but if you are a bad credit holder than a fear psychosis of exorbitant rates or being discriminated may check your advances for the quest of normal loans. This myth is now unshackling as bad creditors like you can approach for bad credit auto loans available at low interest rate. These loans are especially fabricated for people having CCJ?s, arrears, any default payment or due payments. Some facts and figure The lender is more interested in your current repaying capacity rather than seeing the ...

Interest Rate On Refinance Home Loans Explained
The interest rate issue is the main problem when one wants to refinance a home loan. This is because the costs associated with home loans are high and thus, a single point raise on the interest rate can cost thousands of dollars. There are different reasons why one may want to refinance but the interest rate is always an important variable.

How to Find Lower Interest Rates on Bankruptcy Car Loans
Sadly, bankruptcy has become more common in recent years. Finding loans has gotten easier over the years as well. The loans are easily available but it is the interest rates attached to them that most people try to avoid. It doesnt make sense to get approved for a loan but not be able to make the monthly payments because the interest rates cause it to be so high. Educating yourself is the best defense in not being taken advantage of. Make sure you do the research and be patient when looking.

Get Personal Loan, Home Loan, Car Loan after Bankruptcy at Low Rate of Interest
Do you feel your chances of getting approved for a loan after filing bankruptcy is bleak. Wait for a while, bankruptcy loan can help you even after filing for bankruptcy, getting approved for funds after a bankruptcy is not that daunting as you think.

Importance Of Interest Rate On Refinance Loans
The interest rate is an issue that should never be bypassed when it comes to refinance home loans. Its importance is crucial as it will determine whether you benefit from refinancing or not. Though other loan terms like loan length, loan amount, and other less important clauses should also be considered, the interest rate should be your main concern.

A secured bad credit home mortgage loan comes with reduced interest rates
A secured bad credit home mortgage loan comes with reduced interest rates

Know The Interest Rates When Financing A Loan
It has become quite common for people to finance an auto loan when purchasing an automobile these days. When it comes to buying an automobile, not many people could actually afford to pay the car with cash upfront. Because of this, some would rather choose to take out loans for a huge array of high priced essentials. Similarly, there are other loans that fall into the same category including home mortgage loans and school/college loans. Finding the best lending company or institution is something that need to be done and it is not often easy. There are many factors that need to be considered when borrowing a loan and one of the most important factors is the finance rates on the interest of the loan.

Low Interest Rate Auto Loan - Increase Chances Of Getting Approved For A Low Rate
Getting approved for an auto loan is easy. However, obtaining a low rate auto loan may be a bit more challenging. When financing any sort of merchandise, the interest rate received makes a huge difference.