I think I speak for most mortgage professionals when I say that TV Internet ad's are walking a fine line with their advertisements. They seem to promise the world and have payments and interest rates that seem too good to pass up. The truth is you need to read the print.
Luckily for me I have and DVR (digital video recorder) so it is easy for me to pause and rewind things that I want to see basically anytime I need to. Most people don't have that luxury. Ever notice on some mortgage ad's the fine print is so small you can't read it? Sometimes it flashes by so fast there is no way humanly possible for you to read it. (Unless of course you are Superman)
I am not picking on any particular Mortgage Company here because most of them do the same type of ad's. Today I saw and ad from one of those big morgage lenders. They were offering a rate in huge writing 3.375% with an APR of 3.605%
Looks like a great deal right? You decide! Here's the fine print....
Rate is for a purchase loan. Fees & charges apply. Subject to underwriting approval. Not all applicants will be approved. Minimum credit score of 731 required to be eligible for advertised rate. Full documentation & property insurance required. Loans secured by liens against your property. Consolidating debts may increase the time and/or the total amount needed to repay your debt. Taxes & insurance extra. Terms, conditions & restrictions apply. For example, as of 4/1/08, a $250,001 loan amount financed at 3.375% interest (3.605% APR) for 30 years, with 2 point discount, would result in 360 monthly payments of $1399.93. Your rate and term may vary. Lock in fee required to secure rate. 20% downpayment required.Recent rate but subject to change without notice. Rate available on loan amounts from $250,001 to (A) $417,000 (contiguous US) and (B) $625,500 (AK and HI) on owner-occupied single-family residential properties. Call for details.
As you can see that rate and program only applies to a limited amount of buyers and there are additonal fees that you have to pay to secure that rate. At a minimum $5000.00 on a $250,000 loan
As a consumer you should definitely shop around and make sure that you are getting the best deal you can. Just remember that with these Internet companies their goal is to get you to pick up the phone and call them. The rates and programs they usually offer may not apply to your specific situation.
It's been my experience that working with a local mortgage lender face to face will usually be in your be interest.
Be an informed buyer!
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