Your clients have got themselves a great 30 year fixed rate loan at a wonderful rate of 5.5%. So they close on their home and that is when the letters start. Refinance! Save money each month! Pay off your credit card bills! Heck these letters start before the house has even closed because of the credit bureaus selling their information to every loan chasing mortgage broker out there.

But, what you really need to do is warn them about is the scams out there. The misleading letters that attempt to get people to switch their mortgage from their current lender to some scum bag that tricks them in to a higher loan percentage and huge closing costs.

My parents recently closed on their new home and within days they started receiving letters saying they should refinance to save money. But, one that they got really concerned them and they almost fell for it had they not called me first.

The letter said that, "Your interest rate lock expires in 60 days and that your interest on your current loan will go up if you don't call in today and lock in your rate." They thought this was from their current lender and panicked that they didn't have a 30 year fixed like they thought and that in 60 days their interest rate was going to rise and they wouldn't be able to afford the payments if it went up too high.

I assured them that they had a 30 year fixed and even pulled their loan paperwork out and checked it with them again. If they read the fine print, they would have seen that it wasn't from their current lender and that they may not have an adjustable rate mortgage.

But, had they fallen for this, they very well could have refinanced within 60 days of closing, costing them 1.5% higher interest rate per month and an additional $10,000 in closing costs. So warn your buyers that these letters are out there and they are just out to get in their pockets. They need to just put them in the circular file by their desks.

Todd Clark - broker
Kastings & Associates
Phone: (503)524-9494
Fax: (503)622-8739