Julie
Guthrie,#2Consumer Suggestion
Fri, May 27, 2005
This is way I always say pay cash. Sure you have to make some serious sacrifices to turn things around, but geez, having to go through this would have made me batty. I saved my money and paid cash for a car. I am almost entirely debt free now. I can't stand it when I look at how much I have paid out in interest charges alone. PAY CASH. Easier said than done, but it can happen!
Steve
Corona,#3Consumer Suggestion
Thu, May 26, 2005
...it probably is. We have all been told that many times in life, right? I've been a loan officer for several years now and I see this "bait and switch" sales tactic everyday. I respond to their loan inquiry on Lending Tree, Lower My Bills, Loan Web, etc and help them create a new home loan that accomplishes their goals. The lenders, media, the internet, etc. has whipped everyone up into a "low rate" frenzy. These low rates are reserved for the highest rated loan scenarios as defined by Fannie Mae. It is not just the homeowner credit score that earns the great low rate, it is also the CRITERIA OF THIS PARTICULAR LOAN that earns the low rate and payments. Example: Homeowners "A" have 700+ FICO scores, never any late payments of any kind, great work history, plenty of income, low debt ratios, etc. No debt consolidation. They want to refinance their home mortgage just to get a better rate. The loan-to-value is 70%. Today, May 26, 2005 they would get a 5.7% rate on a 30 year fixed rate mortgage without paying any points. Easy deal. If they are taking some cash out to pay bills, add about .25% to the rate. If they get the loan to value up to 80% add another .25%. If their FICO scores were in the low 600's add at least another full 1%. You see? Stop being so "rate driven" and LISTEN CAREFULLY to what the loan officer is saying and asking. ASK questions back to confirm what you are being told and why. If the person on the other end of the phone sounds like a "used car salesman", then that what he was probably doing last week. Now he is a "loan officer". He is TELLING YOU WHAT YOU WANT TO HEAR. Now, on the other hand, if the professional you are speaking with takes the time to take a full credit application, ask you about your home, its value, your other liquid assets, your jobs, your income, your credit history-GOOD and BAD, and really listens to what you want to accomplish. He offers money saving suggestions or alternatives if there is something better available. He KNOWS his products thoroughly, and listens to you. Who would you rather have handle your single largest financial transaction? The guy who really has a thorough understanding of your loan request or the guy who was selling 1989 Hyundais last week? Remember....if it sounds tood to be true, especially in a home loan, it ALWAYS is.
Steve
Corona,#4Consumer Suggestion
Thu, May 26, 2005
...it probably is. We have all been told that many times in life, right? I've been a loan officer for several years now and I see this "bait and switch" sales tactic everyday. I respond to their loan inquiry on Lending Tree, Lower My Bills, Loan Web, etc and help them create a new home loan that accomplishes their goals. The lenders, media, the internet, etc. has whipped everyone up into a "low rate" frenzy. These low rates are reserved for the highest rated loan scenarios as defined by Fannie Mae. It is not just the homeowner credit score that earns the great low rate, it is also the CRITERIA OF THIS PARTICULAR LOAN that earns the low rate and payments. Example: Homeowners "A" have 700+ FICO scores, never any late payments of any kind, great work history, plenty of income, low debt ratios, etc. No debt consolidation. They want to refinance their home mortgage just to get a better rate. The loan-to-value is 70%. Today, May 26, 2005 they would get a 5.7% rate on a 30 year fixed rate mortgage without paying any points. Easy deal. If they are taking some cash out to pay bills, add about .25% to the rate. If they get the loan to value up to 80% add another .25%. If their FICO scores were in the low 600's add at least another full 1%. You see? Stop being so "rate driven" and LISTEN CAREFULLY to what the loan officer is saying and asking. ASK questions back to confirm what you are being told and why. If the person on the other end of the phone sounds like a "used car salesman", then that what he was probably doing last week. Now he is a "loan officer". He is TELLING YOU WHAT YOU WANT TO HEAR. Now, on the other hand, if the professional you are speaking with takes the time to take a full credit application, ask you about your home, its value, your other liquid assets, your jobs, your income, your credit history-GOOD and BAD, and really listens to what you want to accomplish. He offers money saving suggestions or alternatives if there is something better available. He KNOWS his products thoroughly, and listens to you. Who would you rather have handle your single largest financial transaction? The guy who really has a thorough understanding of your loan request or the guy who was selling 1989 Hyundais last week? Remember....if it sounds tood to be true, especially in a home loan, it ALWAYS is.
Don
Connellsville,#5UPDATE Employee
Wed, May 25, 2005
Your situation is not uncommon. As an employee in a loan sales office, it was their job to get your attention and make you interested in a mortgage loan. The truth is, there is no way for any representative to quote you a guaranteed rate or any other loan term until it is final approved. Factors such as loan to value percentage, debt to income ratio, disposable income, and credit qualifications are what determine how your loan is priced. It sounds like the sales office was forced to make the loan to 100% of your equity for consolidation purposes (which increases the rate due to higher credit risk), and change it to an ARM for to lower the inital payments just to budget the deal, due to less income than expected. What you need to realize is that no quote, offer, rate, term, or payment is legally binding until the contract is signed; and no proposal is in any form a commitment to lend. It clearly sounds like this deal was not the best option for you, and you realized that soon enough. Its unfortunate that some managers and employees do not value honesty and integrity as a part of their everyday business.