If a Mortgage Rate Looks Too Good to Be True, It Usually Is – Here Is Why

Posted by admin on Jul 28, 2019 1:14 AM

With the housing market ever-changing and evolving, there is always going to be speculation and uncertainty about how high interest rates are heading. Experts say there is both good news and bad news about getting a mortgage at this time. The bad news is no matter what the circumstances, the simple truth will always remain: if it sounds good to be true, it probably is.

The good news is that mortgage rates are still low compared to recent years, and there are still many safe home loans available. However, buyers have to be much warier then they had to be in the past. To find safe loans, you must filter through many advertisements and offers and decide if the deal sounds too good to be true.

Everyone has seen the cheesy ads and heard the catchy jingles for all kinds of gimmicky loans. Experts advise steering clear of offers that include words like “no fees,” “unlimited refinancing,” “interest only,” and “no cash out of pocket.” When companies promise you these kinds of offers, they do not mention that the money has to come from somewhere. The cost of getting the loan is rolled into the loan itself, so you end up paying a fee for a loan without it being upfront. It is too good to be true.

When it comes to home loans, you do not want to take a chance on gambling. It is better to be safe and secure. As for these gimmicky loans which try to encourage you to buy a big, beautiful home because you deserve it take a step back and think it through. In reality, can you really afford that home? Lenders make their profits based on the size of the loan they get you to agree upon. It should come as no surprise, then, that many of them have no problem stretching your credit as far as they can to allow you to qualify for the monthly payments.

Another point to remember is that once you qualify for a “too good to be true” loan and get your dream home, you have to keep it, maintain it, heat it, and furnish it. Once a home is purchased, if you can barely afford the monthly payments, you will be trapped by your debts, causing you to add to the loan and subtract from your equity.

Interest rates are not as low as they were two years ago, but they are lower than they were during the great housing market decline. If you are trying to buy a home, refinance your way out of a mortgage, or combine mortgages, there are still some safe ways to do so. It is also within our nature to believe what we are told by a company that we want to trust. However, buyers must beware.

So, next time you hear the jingles and see the commercials for the great mortgage deals that you so desperately want to believe, use caution. It is always best to remember the one thing that is true for any aspect of most things in the economy, and in life: if it sounds too good to be true, it probably is.

If you do have questions about your loan or a loan you are looking at give me a call.

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If a Mortgage Rate Looks Too Good to Be True, It Usually Is – Here Is Why

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