See Through the Mortgage Sales Pitch
By David Ackley
05/09/2006
Whenever you are about to apply for a loan, you need to realize one simple fact: mortgage brokers, loan officers and bankers are salespeople.
Like anything else, you can have a good salesman or a bad salesperson. He or she may have your best interests in mind, or he or she may simply want to close the deal and earn their commission. Obviously in order to agree to a mortgage loan, you need to place a certain amount of trust in this person and hope they come through in the end. What follows are a series of tips to help you hopefully make a good decision. Keep in mind, the information presented here is in no way guaranteed – apply for and accept loans at your own risk.
First, pay close attention to any numbers thrown your way. A seemingly handsome monthly savings may cost you thousands over the life of the loan. For example, a lender may offer to refinance your loan in a way that cuts your monthly expenses by $100. However, he may in turn bump up your interest rate from say, 6% to 7%. This extra 1 per cent will mean thousands over the life of the loan.
Next, if it sounds too good to be true, it probably is. Beware of big promises that loan officers may make which seem unrealistic or out of line with what all of their competition is telling you. Sometimes you don’t find out until closing that there are hidden costs you weren’t aware of in the beginning.
The moral of this story is, be a good listener, take good notes and be wary of anything that sounds too good to be true, because it probably is.
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