Beware Rates That Seem Too Good to Be True!

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Real Estate Agent with Henderson, Thornton, Broomfield and Westminster 100026886
https://activerain.com/droplet/4btr

Beware Rates That Seem Too Good to Be True!

 

Too good to be True Rates Oh, if only they had asked a licensed loan officer ahead of time!

This is what the buyers were "promised" as their rate.

Needless to say, this "rate" didn't really exist.  Just like those emails you get that say you've won the Nigerian lottery, or that a heretofore unknown relative has passed away and left you several million dollars in a bank in the Phillipines (if you'll only send along your social security number and bank accounts), this one just probably doesn't exist.

So, how do you protect yourself?  Well, rates have been at lows that haven't been seen in several decades, and they have bumped along at numbers that start with 3 and 4....and even 2 in some cases.  But be sure to check what the rates truly are.  This can be accomplished by a quick Google search.  Know that the interest rates change daily, and that there are several products out there to choose from, including 15 year and 30 fixed rates, and 5 year and 1 year ARMs (which stand for Adjustable Rate Mortgages.)  Keep in mind that the very best rates often require spotless credit scores, too.

Check with a licensed, local loan officer.  Products can vary by locale (FHA loan limits, for example), and your best bet is to have a lender who is very familiar with the local market.  This will also help insure that your appraiser is familiar with the local area!

So, what happened to those buyers?  Well, their "real" rate ended up being around 4.5%, which put them in a different house-hunting dollar amount.  But not until after the loan conditions deadline passed, costing them several thousand dollars in Earnest Money, as well as their dream house.

Always remember that if the Rate seems Too Good To Be True, it probably is!  Don't find out the hard way....

Know that I am NOT a loan officer, nor do I play one on TV.  ALWAYS get expert advice from an actual lender when you are considering a home purchase!

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Rainmaker
592,840
Than Maynard
Coldwell Banker Heart of Oklahoma - Purcell, OK
Broker - Licensed to List & Sell - 405-990-8862

To bad all the new rules don't punish these bogus rate companies or make them make the 'fine' print more understandable.

Feb 05, 2014 04:14 AM #1
Rainmaker
508,551
Jim Patton
Aspire Home Real Estate 209-404-0816 - Modesto, CA
Realtor - Stanislaus ,Merced, San Joaquin Counties

So are you telling me that that Nigerian prince is not going to transfer $8,000,000 into my bank account? There is always someone that is willing to take advantage of the unsuspecting.  Good post Jennifer.

Feb 05, 2014 07:32 AM #2
Rainer
345,849
Jennifer Prestwich
Henderson, Thornton, Broomfield and Westminster - Henderson, CO
Madison & Co Properties

Than-I wish!  It is so distressing to hear about buyers getting rooked like this.

Jim- Well, you could always try, but I wouldn't recommend it, lol!  Those scammers hurt my head.

Feb 05, 2014 07:39 AM #3
Rainmaker
1,143,971
David Shamansky
US Mortgages - David Shamansky - Highlands Ranch, CO
Creative, Aggressive & 560 FICO - OK, Colorado Mtg

The internet is a perfect place for a cesspool of liars. They all believe if you dont advertise the lowest rate you dont get leads so they all lie??? I dont get it but whatever. We market what we OFFER. We close those loans EXACTLY as we advertise. Its not hard to do business but if you are an internet rate shopper then you are in for a humongous reality check and sad time come closing (if one ever happens at all)

Feb 05, 2014 12:25 PM #4
Rainmaker
1,883,803
Lottie Kendall
Compass - San Francisco, CA
Helping make your real estate dreams a reality

Great advice, Jenn. I hope potential buyers remember that and save themselves a lot of grief.

Feb 06, 2014 12:50 AM #5
Rainer
345,849
Jennifer Prestwich
Henderson, Thornton, Broomfield and Westminster - Henderson, CO
Madison & Co Properties

David- Ain't it the truth?  This is why any buyer should do their research!  And trusting a good local LO like yourself is KEY.

Lottie- Thanks!  NO ONE wants to get all the way up to closing only to have the rug pulled out from their loan.

Feb 06, 2014 04:04 AM #6
Rainmaker
767,240
Pete Xavier
Investments to Luxury - Pacific Palisades, CA
Outstanding Agent Referrals-Nationwide

Timeless advice!

Many finance companies operate like this, using a number plucked out of thin air to hook their prey.

To really be sure, obtain a locked in rate in writing from a loan officer.

May 15, 2014 07:23 PM #7
Rainer
345,849
Jennifer Prestwich
Henderson, Thornton, Broomfield and Westminster - Henderson, CO
Madison & Co Properties

Pete- a locked rate is the only way to go, in my opinion!

May 16, 2014 02:47 AM #8
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Rainer
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Jennifer Prestwich

Madison & Co Properties
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