Read the truth behind deceptive mortgage ads

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 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, alleging that the company deceptively advertised variable interest rates as fixed rates on its site, 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.

Learn what to look for when shopping for a mortgage and how to spot deceptive mortgage ads.



Always talk to several different lenders before committing to a mortgage application with one company. Ask lots of questions and take clear notes. If you don't fully understand something, ask follow up questions. If the loan officer makes contradictory statements, make sure you ask why he is contradicting himself. Make sure you find an honest lender to work with. But, don't just assume that a low cost lender must be dishonest just because his rates or fees seem "too good to be true". Sometimes, the well established lenders are the most expensive because many of their customers don't shop around. Do your homework and be an informed mortgage refinance consumer or first time homebuyer.

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