It's that time of the year again. Holiday spending was up another 5% this year to .... get this..... $457.4 Billion. As reported By Parija B. Kavilanz, CNNMoney.com staff writer in the article found here. That's right, billion with a "B". And, once the credit card bills begin to get delivered.... the slaughter will begin. Many might be thinking that I'm going to drone on about the high cost of credit, how long it will take to pay off those credit cards, fees, penalties, etc... Not this time.
The ritual that I'm referring to is mortgage refinancing. Every year thousands of homeowners find themselves in a little trouble with last years spending habits. And this year many people are going to get the old Double Whammy with roughly 12% of adjustable mortgages coming due. Scratching their heads trying to figure out how they will make ends meet, refinancing (or debt consolidation) begins to look appealing. I know, I've been involved in real estate for 20 years, for the last 10 I have actually owned 3 mortgage companies and I can tell you this happens every year... like clockwork.
But here is where it get's a little scary. I like to call the mortgage business "the Wild West". There is no other business where you will find such a wide variety of interest rates and accompanying charges between companies --- for the exact same loan. Please pay attention.... there is only ONE reason for this. Lenders, mortgage companies, brokers, loan originators, loan officers..... GREED. And trust me when I say they are licking their chops waiting for the slaughter to begin.
A lot of consumers try to be smart about getting a home loan. They call 5 different lenders looking at the different rate and fees that each propose. These people "try" to get the best deal for themselves, but little do they know that their efforts will probably be fruitless. Let me summarize the real problem with the mortgage business and consumers getting the best deal.
1. Providing a mortgage should be thought of as a product and not a service. And as a product should have a general worth attached to it --- regardless of the size of the loan provided. Only if people shop for a mortgage based upon how much the mortgage company / lender will make in revenue can they truly get the best deal.
2. Unless you're in the business, it is virtually impossible to determine how much a lender / mortgage company will make off of your transaction. And, let's face it... who has the time or inclination to get super educated on the subject?
What's the solution? More government regulation? Nah, they keep trying, passing more and more regulation each year. To be fair, these regulations have had a share in eliminating the worst of the worst, but hasn't helped a bit for the day-in, day-out ordinary transactions.
Finally, a solution from within the industry itself. What is really needed is some independent, third party advice. Someone without a paycheck riding on the answers. There is at least one web site that promises to do just that. At Free Loan Advice people can download the Free guide titled "The Ultimate Mortgage Shopping Guide". Additionally, they can utilize other resources such as hundreds of articles on virtually every subject having to do with interest rates and mortgages, they can also Ask the Expert for any loan questions they may have. But most importantly this site offersThe Rate and Fee Analyzer, which gives people the answer to the ultimate question.... How much are they making off of me?
This Spam-Free website is 100% Free of any charge and is available to everyone. As web sites like this gain popularity, a fundamental shift in the mortgage industry is underway. The annual "slaughter" will become less and less severe, until one day --- the playing field will be leveled --- and consumers will never again be "taken" by unscrupulous lenders. And, this is all without increased governmental regulation or additional fees of any kind.
Anyone who may be in the market for a refinance or purchase are highly encouraged to check it all out at http://www.freeloanadvice.net
If your family or friends are in the market ... do them a favor and e-mail this article to them as well.
About the Author
With over 20 years in real estate / mortgages, Andrew Bloom has agreed to reveal the true secrets to getting the best possible deal. http://www.freeloanadvice.net is a spam-free site offering genuine, quality mortgage advice that is always 100% Free of any charges.
