I recently received a letter in the mail from a mortgage lender in the Cincinnati area that said:

Have You Heard About The Special Mortgage Program That Has A Fixed Interest Rate and Could Lower Your Payments By Hundreds of Dollars Per Month?

The problem I have with this type of advertising is that it’s usually not in the best interest of the consumer. When you really think about it, what are the only ways to lower your monthly payment?

1. Increase the number of years on the loan,
2. The fixed rate could be a “temporary” rate, later to be increased over time
3. Put down a larger down payment

Lenders are trying to come up with ways to get consumers to re-finance their mortgages or to take out 2nd mortgages or home equity loans, etc. They’re in the business of lending money and with real estate sales down this year, they need to find other sources of increasing their profits.

So how do you know if any advertised TV ad, radio commercial or direct mail piece about getting a new mortgage is really something you should consider?

Well, before doing anything else, call a trusted mortgage professional. They can review your situation and give you an un-biased opinion on what your best options are. 

There are too many people who fall victim to the common “bait & switch” scams. Lenders and telemarketers, who call you on the phone, are often “FAST” talkers, who make everything sound so easy to do and such a great deal. They may even say that you can sign up for their ‘great’ program on-line and never meet anyone.

WRONG!

You always need to have someone to talk to and go over all of your options with you. The “salesperson” may be trying to “sell” you a mortgage program that is terrible for you, but great for them. There may be a lot of closing costs and junk fees associated with or built into the loan that you don’t know about until you sign the final papers.

If you’re thinking about re-financing your mortgage, it should be for one of the following reasons:

1. Converting your adjustable rate into a fixed rate mortgage
2. Converting your 30 yr loan to a 20 or 15 yr loan
3. Consolidating bills into your mortgage, (then cut up your credit card)
4. Qualifying for a lower fixed rate, because your credit score has gone up
5. Getting a lower interest rate with a no-closing cost loan (your payment goes down with no additional out of pocket expense to you)
6. Removing Private Mortgage Insurance from your monthly payment

Don’t get taken advantage of by some “slick” salesperson.