In today's high paced informational society, individuals and companies rely on their marketing presence. One of the top three ways to market themselves or a certain message and/or product is through the internet, newspaper ads, and the radio. With this said, how much information is misleading to the general consumer?

With over 15 years in the mortgage industry, I have seen my share of false or misleading advertising. Lenn Harley wrote an excellent eye awaking article on interest rates that are advertised as "HISTORICALLY LOW" . I definitely could relate to her frustration, because I agree with her message, but I wanted to shed some light on reality. 

                                            REALITY

What one person might think is one thing, another might think differently. But when we take a term, 'historically low', and possibly make the statement, 'historically low rates',  we are misleading the general public. Let's look at the definition of definition of historically from the Free Dictionary.  Historical from Webster's dictionary states : based on history, or having the character of history.

As we can see, this term, Historically Low Rates, does not mean that it's been the lowest. That it has happened only once, that this is the first time. Our human intellect tells us otherwise. Just from that three word phrase, historically low rates, we can safely assume, without breaking it down, that it means the lowest ever. At least when you talk to the average consumer or many of the realtors and/or loan officers in this business.

Overall, just as the driver in the cartoon to your left thinks that he is sexy, but the police officer doesn't agree. We don't know, but the ticket could be for "misleading"?  

Conclusion :   How important is it that the consumer be educated on so many issues, especially the misconception of how 'historically low rates' sounds when mentioned. That was the point of Lenn Harley's post, educating the client on perception and fact.

So, what is fact in this case?  If you read some of the comments in Lenn's post, you will see some graphs. What they are trying to show you is that rates, 'historically', have been low for the most part since the middle of 2002. I will agree with this for the most part, hence the true definition of 'historically low'. But, if I take a stroll back, I remember giving some clients a 30 year fixed rate at 4.875% to 5.00% with zero points. Today, the same rate with zero points would be right around 6.00%.  On a $200,000 mortgage, that is a difference of about $126 per month. It might not always seem like it is, but for the average consumer, it can be a significant difference.

And in closing, Lenn brings up another great point in regards to comparing rates of the past. Not all of the rates are associated with the same costs. And some of the comments talked about perception and possibly getting the consumer to think positively and not focus on the high prices of homes, making it sound more affordable.

Overall, mortgage companies have a profitability margin that might differentiate from their competition. Here is an excellent quote from Lenn Harley, "IT DEPENDS ON WHAT YOU ARE WILLING TO PAY TO GET THAT HISTORICALLY LOW INTEREST RATE. "

______________________________________________________________________________________________________________________________________________

For more information on FHA loans, please go to this link. The FHA Expert You can also go to this group : The FHA Mortgage Group

For more information on how you can obtain your dream home, please click here : Mortgage Financing Options

Copyright © 2007 by Jeff Belonger