Mortgage Rates and the Lying Liars who Advertise Them

One of the most frustrating things about being an honest mortgage person is watching the dishonest ones get rich with deceptive advertising practices. Recently, I have seen more of this despicable activity than usual.

Both local and national companies are guilty of it. A large national bank recently advertised 30 year fixed rates at 5.5% with an APR of 5.6%. This was at a time when a rate that low would have required 2.5 to 3.0% discount points to achieve. And you sure as hell wouldn't get a 5.6% APR with that much discount being paid. The fast-talking announcer was literally yelling out the interest rates, but there was a small note in the corner of the screen (in low contrast colors) noting that these rates were effective on 1/31/08. Considering that the ad didn't come out until late February, they knew when they aired the ad that they couldn't possibly deliver what the ad promised.

Why would they do that, you ask? Simple. They want you to call. Once you are on the phone, they can point out that the information was dated, but they were still the best company in the whole world to deal with. In other words, they are perfectly willing to lie to you in order to create a selling opportunity. If it happens to you, hang up the phone and call somebody local who will give you a real rate quote that they can really deliver. Pick somebody who has been in business more than five years.

Here is the other headline that should send you running: "FEDS SLASH RATES, GET THE LOWEST MORTGAGE RATES EVER!" As I may have mentioned in previous articles, the Federal Discount Rate does not affect long term mortgage rates. These rates are generally closely related to the 10 year bond. However, variable rate loans including some home equity credit lines that are tied to Prime rate may be affected. Much more likely is that long-term mortgage rates will go UP every time the Federal Reserve lowers discount rates. That is exactly what has happened in the last two Fed rate reductions. Again, the proper response to this lie is to run away as fast as you can. They are LYING!

Jon Laird is co-owner of Sterling Mortgage Corporation, one of Arizona's oldest licensed mortgage brokerage firms. Sterling Mortgage Corporation has specialized in manufactured home loans for more than 23 years. Jon has more than 32 years experience in home lending and is a state certified continuing education instructor. He frequently teaches manufactured home financing classes for real estate agents renewing their licenses. To read more from Jon visit: http://www.sterlingmortgageloans.com Article Source: http://EzineArticles.com/?expert=Jon_Laird