PET PEEVES

High on my list of pet peeves are mortgage advertisements. Have you noticed the large number of ads telling you its time to refinance your ARM mortgage to a fixed rate? Weren't these the same guys who advised you to get the ARM mortgage in the first place? Granted, we have seen a number of borrowers who probably should refinance their adjustable rate loan but many of them can't afford the higher payments of a fixed rate or the closing costs necessary to obtain the new loan. The fact is, the only way they could get into the home the wanted was with the aid of a higher risk adjustable mortgage. While we did encourage some borrowers to incur adjustable mortgages, we spent a lot of time making sure they were familiar with the risks and had an exit strategy in place in case rates escalated. We never used ARMs to help borrowers purchase homes they couldn't afford. Speaking of closing costs, do you see those ads that offer no closing cost loans and tell borrowers how they are getting ripped off by unethical lenders who charge enormous closing costs. They promote their no-cost loans as "The biggest no-brainer in the history of Earth." Could that statement be a huge exaggeration? What they fail to mention is that their no-cost loans bear interest at 1-2% higher than closing cost loans. Virtually any lender can offer these no cost loans. The key is that borrowers need to be informed of the trade-off between rates and closing costs. This allows them to choose the combination that fits their situation. There is no "one size fits all" mortgage. The bottom line is that the most important factor in the mortgage lending process is choosing the loan that fits your needs. The lowest rate in town could be the wrong deal for you if it is not the right product. Call our office if you have a question in this area.