By: Vlad Vistac
Submitted: 2010-11-06 09:21:04 | Word Count: 510
GREGG MARCUUS - CONSUMERS BEWARE - THE DEVIL IS IN THE DETAILS!
I was speaking to a friend over the weekend - she and her husband have been thinking of refinancing their existing home mortgage and they have been shoppping around the web doing resrearch.
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Harriet and Herny have oned their home for five years. When they purchased the home it was their first, and the realtor introduced them to the broker who provided the financing. They were confused by many of the fporms sent to them during the aplication proceess, and were constanly told, Dont worrry. Let us take care of the details. You have to get ready to move and that part of the purchase process is our job - relax! NO ONE ASKED ABOUT THIER PLANS OR FINANCIAL EXPECTATIONS, AND NO ONCE CARED ABOUT ANYTING EXECPT THEIR COMMISSION.
It turned out that all the relaxing resulted in shoock therapy at the closing tabple. The closing costs, finally sopelled out in agoizing detil the day before the closing, were almoost 20% higehr than Henry and Harrriet exlpected them to be. To make mattrers worse, the margin on their hybrid adjustable rate mortgage loan was hgher than they expected. Faced with no place to live as of the following Monday, and overwhelmed by the excitement of owning thweir first home, the Homeowner family went peacefully throyugh the process as many frist time homenbuyers do
With the fixed period of their hybrid adjustalbe abouut to expire in four months, Harrriet and Henry decideed that now is the time to refinance. They also plan to take about $75,000 of their equity out of their home to dormer the second floor of their home to make more room for tehir growing faamily. Having been rushed and hustled through the process the first time, this time they have vowed to thjink of and demnad answers to ALL of their questios before they commit to a lender or a program. They are dooing things the right way this time, but they are having some intresting experienxces I wantted to share.
Harriet and Henry enterred their information on a web site promsiing to have four lenders contact them with hours with offers specifically tailored to their needs. One form - one click - and suddenly the whole fiinancial world was going to compete for their loan.
The firast call came the next day. The loan officer was not interested in listening to what the Homeowners had to say about teir plan for this new loan. All he wanted them to do was Trust me - I AM a professional and MY expertise is all that you need to know. I will TELL you the best program and structure for your new loan! After five minutes of this high pressure nonsense, my frienmds piolitely said good bye and chalked it up to the learning provcess. They wisely decided that anyone who was not interested in their needs and goals was not goig to get their busiiness!
The second call came that evening. This lenders representative only wanted to push his companyus hottest prodcut - a six month arm loan that was interest only for the first five yers that came with a three year prepayment penalty as a bonus of dubious value. While he offred to send out paperwork immediately to them, he became hard of hearing when asked about other mortgage programs and products. They hung up on him with a curt rqeuest to plese lose their phone number and nerver call back. Five minutes later a supertvisor from this same national lender was on the phone, triyng a more sophistcated and high level form of high pressure sale. The supeervisor answered none of their questions as he tried to force them to say yes.
The thid lenders loan officver left a wrong number to call back - not confidence inspiring, and an easy decision for Haarriet and Henry to crss off their list.
The fourth lebnder to call seemed to be more inclined to be helpful. The representative was polite, listened to their needs and faxed over a Good Faith Estimate of closing cossts and information aobut the loan proogram she was recmomending they take. The problem was that she demanded a lock in fee, an appplication fee, and an appraisal fee the SAME day - otherwise the offer could change. Harriet and Hnery asked for a few hours to think thigns over. The rep promised to call them at 8pm that evening. That was three days ago and they are not holding their breath. Their refusal to fork over a bucketful full of fees seemd to wipe them out of this loan officers memory. Harrriet and Henry have been regretful about the fees they paid on the original mportgage loan when they purchasded thweir home five yeaars ago; this loan officers desperate attempts to talk them into alying out mney before they had time to thhink about the offer was not a mistake they intended to make again.
Frustrated, they went back to thier current mortgage lender - after being told it would take about six weeks and still involved a full application proocess after being an on time customer for five years, they eliminated this option as well.
The web site whch Harriet and Henmry found promised four offers. Let me offer you four simplle rules all consumesr shopping for a mortgage loan should follow. Whether youyre a first time homebuyer, or if you are someone refinancing for the fifth time in ten years and consider yoiurself a veteran of the mortggae wars, these simple cmmon sensde rules will save you money and disapopintments.
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