How stupid does one have to be in order to ‘take advantage’ or in reality, be ‘taken advantage of’ by some of these mortgage company advertisements? Are these current Mortgage advertisements BS or NOT? Sure, they may have a catchy name, or maybe even a snappy catch phrase, but a few fancy words or a snappy phrase does not that mean that the mortgage lender is reputable. Some of these lenders even have what are presented as testimonials… Supposedly, the people saying these things are customers…? “Using Joe’s Mortgage Company, I saved, or I am saving so much money”; “I switched Mortgage Companies to Bob’s Mortgages because I found out how I could save more money for the future”; “I found a better Mortgage company and started saving money right away” how about “It was so easy to get my mortgage refinanced with Ted’s Mortgage company”; or “great Mortgages where you can lower your mortgage payment”. How many of these so-called testimonials are genuine and how many would you suspect are (BS) paid or otherwise compensated endorsements? Some of these speakers, let's call them what they really are, 'actors' (and poor ones at that) are even starting to comment about the competition and how these competitors aren't really what they say they are, or maybe don't deliver as advertised. It is getting more and more difficult to find a mortgage company that you can believe in and trust.
Then there are the naming schemes for these mortgage companies; could there be any worse names for these money making schemes? While some of these companies have fairly innocuous names, some of them are simply ridiculous to anyone with even a partial college education. An example of this would be a certain vendor offering “Smart” loans. Ok, at first, that sounds interesting, after all, most mortgages are set up for 15 or more years of payments. That is a long time to be making payments and the interest alone can be very expensive.
So, someone came up with a the idea of calling their mortgage offer ‘Smart’, if you really consider what you would be doing, the only person that is ‘smart’ for doing this is the owner of that organization. That is of course, considering that anyone actually gets their mortgage refinanced through them. Then there are the not so direct comparisons they provide in order to sway a mortgager into using the ‘service’ offered. Of course, they never mention any competitor name; they only refer to them in a general way. I say that if you can’t or won’t refer to the competition in a direct way, then nothing you present in that comparison is genuine and should be disregarded.
Allowing this group to essentially buy your mortgage from your current mortgage owner, and then resell it back to you is STUPID if only made the lower payments they offer. Doing so means that you are only paying the interest accrued on the principle thereby never reducing the principle, this means that you are throwing your money away. The rich get richer and the mortgagee never gets the debt paid off. So, there is nothing smart about that process in the least little way, at least not for the home owner. Next time that insipid commercial plays, listen to the stupidity; if you don’t catch it, they are looking for you. Now don’t get me wrong, a lower interest rate is what everyone wants; but only paying the interest every month is not worth anything, to anyone, anytime. Maybe that lower (interest only) payment allows you to buy a redneck jet ski or some other toy and not have to pay any interest on that particular purchase… Think again, because you did pay interest on it, and you will continue to pay interest on it until the mortgage is paid in full, if ever. In other words, an interest-only loan is likely not in your best interest unless you are in dire circumstances and cannot get a lower payment anywhere else. I would go so far as to attempt to get my current mortgage lender to accept lower payments for awhile first if necessary; this might allow me to continue paying at least some on the principle.
I am not trying to sell anyone a new mortgage refinance deal, or loan them any money. I just want them to be informed and hopefully, not get taken in by these scam artist companies who only want your money. Well, maybe that’s not all they want…? Say Tom gets a so-called smart loan and starts making these interest only payments, he makes them on time for some period of time and then he loses his job, his wife, his car and most of his life. The mortgage vendor says Tom; “You still owe us all of the principle because you never paid anything more than the interest on original amount. What? You don’t have any money? Well, now we own your house and we get to keep all of those interest only payments too. Thanks for playing!” We all know that it takes people to run a business, but what kind of person does it take to sell someone a mortgage that is designed to be self perpetuating? I do not think that I could or would even want to work at some place that was meant to prey on the misfortune of others.
I would expect that there are some reputable mortgage companies out there, I am only pointing out the idea that some may be, and some definitely are, less reputable than others.