Hey guys, Evan Swanson here to talk to you today about something that drives me crazy. That is phone and mail solicitations on mortgages.
As a mortgage professional, I get them just like you do. The only difference might be I have a little easier time navigating and understanding the information they’re trying to share. I can tell you, 99 times out of 100, these companies don’t care about your financial well-being. They are only interested in making a commission and doing the transaction.
Example, here’s a solicitation my wife and I received recently. Understand, I don’t mind telling you that we locked our rate in at a few years ago. We have a 3.50% 30-year fixed rate mortgage. This company is telling us that we could refinance and get cash out of $41,000. It’s telling us to refinance into a higher interest rate than we currently have. It’s telling us that we can eliminate our mortgage insurance. Yet, we don’t have mortgage insurance. It’s also telling us here that no equity is required to make the loan.
However, if you flip over to the back and read the small print it says “30-year term conventional loan with a minimum of 20% equity.” Wait a minute. I thought you said there was no equity required?
Here’s another solicitation a colleague of mine got who currently has a 2.50% fixed rate mortgage on their house with 18 years left. Their own mortgage company is soliciting them to try to refinance into a 30-year term at 5.25%, and then it’s telling them they can expect to save money annually. I’m sorry, but if you take a 2.50% fixed rate and turn that to a 5.25%, there is no savings. There may be cash flow savings because they’re spreading their payment of principal over 12 additional years, but that’s not savings to the customer.
Bottom line, guys, if you’re interested in getting your house looked at for refinance, don’t go with one of these solicitation companies. They don’t care about your financial outcome. They’re only interested in their own well-being.
Contact your local mortgage broker today. Talk to someone who knows what they’re doing and will give you a fair assessment of your options.
Of course, I would love to make myself available to you. Please contact me today!