Getting a low interest rate on your mortgage can make a big difference in your household finances, and the internet can be a good way to compare the rates offered by various lenders. The FTC’s case against GoLoansOnline.com shows the value of shopping around and checking multiple sources of information.
One of the most important considerations is whether a loan is offered at a single fixed rate for the life of the loan, or whether it is an adjustable loan with a rate that changes over time. The FTC recently sued GoLoansOnline.com, alleging that the company deceptively advertised variable interest rates as fixed rates on its site, fhamortgage.com. The site prominently advertised attractive mortgage rates — for example, a 2.5 percent “fixed-rate” — as well as monthly payment quotes reflecting those low rates.
The site’s disclosure page revealed that the interest rates glaringly advertised as fixed-rate mortgages were, in fact, for adjustable rate loans. The prominently advertised low fixed rates were not likely to be available to the average consumer. But the FTC says this information was obscured and in fine print. It’s against the law to bury disclosures in fine print that contradict a more prominent advertising pitch.
If you’re shopping for a mortgage, check out multiple lenders. Compare rates and fees and read lender reviews to find the best loan for you. Figure out how much of a down payment you can safely afford, and find out all the costs involved in the loan. Knowing just the amount of the monthly payment or the interest rate isn’t enough. Get information about the same loan amount, loan term, and type of loan from each potential lender so that you can compare “apples to apples.” Use the Mortgage Shopping worksheet and online mortgage calculators to help you estimate monthly mortgage payments for various loan amounts, interest rates, fees, taxes, and insurance costs.