Financing Follies

One of my pet peaves is listening to the advertisements on the radio or tv.  The ads for home loans are not always straightforward, actually they are down right misleading.  The consumer is beakoned to call a specific lender because they "don't charge closing fees". 

Sure.

Actually the probably don't charge closing fees.  They charge, but they just call the fee by another name.

Consumers only hear the interest rate and think it's a good deal.  The reality is, the consumer needs to know the whole story.  Ask for a "good faith estimate". 

If the consumer decides to go with a lender, they should insist that the lender provide them with a GUARANTEE that the lender will deliver that interest rate in time for the consumer's loan committment date.  It the lender cannot deliver it, the lender will reimburse the consumer's earnest money.  This lender guarantee should be in writing.   If the lender doesn't want to provide a guarantee, then the consumer should find a lender that will.

Unfortunately lenders have absolutely no fiduciary to the consumer.  They can tell them ....whatever and walk away.  It's the consumer that loses.

OF course I must qualify the previous statement, the consumer does have a responsibilty not to change their finacial position after the loan application.  By that I mean, the consumer should not be out charging new furniture or buying boats and cars, etc. 

:)