The Mortgage Rate Rip-Off Report
Hello, my name is Trevor Sines and I'm the Marketing Director for Michigan Mortgage Solutions. I created "The Mortgage Rate Rip-Off Report" to expose the sneaky and deceptive advertising tricks used by mortgage companies to get you to apply for a mortgage. These sneaky tactics make you believe you will qualify for the lowest advertised rate even though getting that rate is highly unlikely.
However, I believe that it's important for you to know that I use these same advertising tactics to generate interest in Michigan Mortgage Solutions. Why...You say? Well, simply because they work and it's my job to make the phone ring. Let me show what I mean...
Why Most Advertised Interest Rates Are Not Even Possible
You see, as marketers, we know most borrowers are taught to look for the lowest rate when shopping for a mortgage. Using this knowledge, we advertise loan scenarios that offer the lowest possible rate but are nearly impossible to obtain due to the "Mortgage Assumptions" associated with the advertised rate.
"Mortgage Assumptions" are simply the requirements that must be met in order to qualify for the advertised rate. If you didn't already know, there are several factors that determine what interest rate you will qualify for and they include; credit score, loan to value, loan amount, term of loan, points paid at close, and the type of loan you get.
Unfortunately, when marketers want to advertise a really low rate, we make some very strong "Mortgage Assumptions" that are not even realistic to our average mortgage transaction. In fact, the assumptions we make would only apply to approximately 10% of our client base.
For instance, when you see a rate advertised at 2.75% the assumptions are for a 5-Year Adjustable rate Mortgage requiring a 740 or higher credit score with a minimum $200,000 loan amount at 70% or less loan to value, and at least one origination point due at closing.
This basically means you would need great credit, 30% equity or a 30% down payment, a loan for $200,000 or more, and you would have to pay $2,000+ in points at close. While the rate for these assumptions would be attractive, most borrowers we deal with don't have that type of equity or down payment money plus they aren't looking to spend an extra $2,000 at close to get an adjustable rate mortgage. This is why this advertised rate is simply a teaser to get you to respond and take the next step.
Let me show you some live examples of this by reviewing some online ads for local mortgage lenders as well as our own website. This short video will allow you to quickly decipher how plausible the advertised rate is for you.
Now that you know the secrets behind those really low advertised mortgage rates, you may be interested in learning how to avoid the low rate "bait & switch" when shopping for the best rate. Lucky for you you can learn all about it by checking out the links below. If you're ready to get pre-approved or you have a mortgage question you'd like to ask, please don't hesitate to call us anytime at (248)674-6450.