Guest Column from Justin McHood.
Is that interest rate you just saw on that advertisement too good to be true?
Have you recently seen an advertisement recently that caught your eye by saying something like “4.5% INTEREST RATES AVAILABLE” only to find out when you call the number that there isn’t a 4.5% interest rate available?
It happens all the time.
And there are two possible reasons for this:
- The 4.5% interest rate was never really available in the first place
- The 4.5% interest rate was available – on the day that the advertisement was printed and mailed
Since I happen to be a mortgage guy myself, I will give whoever-printed-the-advertisement-that-you-saw-with-4.5%-on-it the benefit of the doubt… and here is a simple explanation of how this could happen.
The ad is sent to the outsourced mail center to be processed on Monday. The ad is then printed, stuffed and mailed on Tuesday. You may have actually received the mailer on Friday.
What happened to rates between Monday and Friday?
They went up of course.
Ok, not always — but quite often the rates that were available when the mailer was printed may not be available when you actually get the mailer and call in.
Never Expect Any Interest Rate You See To Match What You Actually Get
Now, I know this sounds crazy. And there are regulators who work very hard to make sure that mortgage companies adhere to strict guidelines for advertisements. But just to be safe – don’t expect to call any mortgage company and say something like “I saw that I could get a 4.5% interest rate today, where do I sign up?”
The first reason not to expect this to happen is because there are many different rates for many different programs – and the ad that caused you to call was just one program with one interest rate. But, and perhaps more importantly — the second reason not to expect this to happen is that by the time you have seen the ad and called, interest rates have probably changed.
Which means you should reasonably think one of two things about the person you speak with on the phone:
“He is trying the old bait-and-switch technique! Promise a low rate and then when they call, give them something else!”
or
“Geez, now that I have had Justin give me a logical answer as to why I can’t get the same rate I see on this advertisement and a place to check Arizona mortgage rates every day… It makes sense!”
And if you took the time to read all of this?
Thinking the latter will be a cinch.
Justin McHood is a nationally published mortgage expert who lives and works right here in Arizona. You will normally find him wearing a blue starched shirt (he says that it goes well with is orange hair) and you can learn more about him at ArizonaMortgageTeam.com