Complaint Review: Household Beneficial - Las Vegas Nevada

Don't buy into their rate-reducer program. It supposedly reduces your payment by something like .25% every year if you have made all your payments on time. However, you lose entire eligibility if you miss even one payment along the way. They sing the praises of their bi-weekly payment plan and the term reduction from 30 to 18 years, but you are in essence making 26 half payments or 13 full payments a year instead of the 12 in a traditional mortgage. 7.95% is a horrible rate on a first mortgage compared to 5.625% which what many lenders are currently offering on a 30 yr. note. If you truly like the idea of your home paying off early, I suggest you look into a 15 year fixed mortgage where rates are closer to 5%. Does your rate start out at 7.95% or is that where it eventually ends up, assuming you have made all your payments "on time". That bi-weekly payment plan crap is a bunch of smoke and mirrors. If you applied an extra payment every year onto a traditional mortgage, it would also pay off at the same very quickly. When I worked for HFC, we were routinely coached on how to handle customer's objections to interest rates that were often as high as 13.49% on first mortgages. They had a way of explaining away these high rates as no big deal because it was supposedly saving the customers hundreds of dollars a month versus the total of their credit card bills and other unsecured debt. However, I soon began to feel bad as I saw such a high rate of customers declare bankruptcy shortly after one of these loans that was supposed to help them out. In addition, Household would often take all the equity out of a customer's home by going to 100% of the property value and then charging 7.25 points that they would subsequently place on the loan, taking the loan to 107% of the value of their home. This means that a loan for $150,000 would start out at $ 161,725.07. In addition, they would often give people second mortgages in addition to this with a maximum value of $25,000. They would charge $ 1,000 over the $25,000 for origination so the balance on credit reports would be 26,000 on a 25,000 line of credit. I know that had to hurt some people's scores by having a subprime lender with a line of credit that was over the balance by $ 1,000. By the way, they would charge ridiculous rates on these accounts like 23.9% Now top that off with a prepayment that equals 6 months interest and you may get an idea why they were so hard to get rid of. On that same house worth $150,000, the prepayment penalty would be about $10,500 on the first mortgage and $3,100 on the second mortgage. Now let's add it all up: to get out of this mortgage on the house that was worth $150,000, it would cost somebody about 201,345. When I first started with them, their prepayment penalties were for 5 years, but they eventually reduced them to 2 years. Do you want to be stuck with a loan like that for 2 years? Also, what happens if you have to move for some reason and you have a prepayment penalty? Well, I never saw them waive one prepayment penalty in the more than 2 years I worked there. I haven't even mentioned their insurance that we were "required" to push onto our clients. Nor have I mentioned the fact that the loans are all calculated on simple interest, meaning that somebody who pays his mortgage 4-5 days after the due date will see none of his money go to the principal of the loan and will actually be short on interest charges for the upcoming cycle. In addition, they charged a late fee of 6% on their loans that were only 10 days late, versus the vast majority of companies that charge much less after 15 days past due. When I worked there, I remember very distictly the regional manager coming in to show us how to fool people into thinking they were getting 11.99% mortgages that would be the same as a 5.85% loan. My advice to you would be to stay as far away from Household/Beneficial as possible. Their business practices were so deceptive that Enron would have been embarrassed. Honestly, I couldn't live with myself toward the end of my employment there.