Why You Can’t Trust Newspaper Mortgage Rate Advertisements

Have you ever seen a mortgage rate advertisement in the newspaper and then went to the bank to find that the rate you’re being offered is definitely not what was in the newspaper. There are several factors that come into play when determining your personal mortgage rate. And there is also the fact that the interest rates can change daily. It is possible that the mortgage company submitted the ad days before it was printed. By the time the printing occurs, the rate is no good. What is dumbfounding about this is that the mortgage lenders know that these advertisements are no good. It’s just a way to bring people through the door. 

Even if the ad says in small print that the rates are good as of “05/01/10,” it doesn’t matter because the ad didn’t print until 05/05/10. So the rates could be anything at that point.

This isn’t saying that every single mortgage lender that advertises in the local newspaper is simply trying to bring people through the door through false mortgage rates. They do want more borrowers, but their intentions are not always bad. Fortunately, there are other ways to look for the most current mortgage rates.

As for other factors that determine your mortgage rate, you might be surprised. Just because the newspaper says you can get a rate of 4.75%, you’re probably not going to necessarily get that rate. Only those with the best credit, with sufficient income, a certain amount of assets, and no second mortgage are going to be able to secure the lowest rate. But that is only if the lowest rate at the time of the mortgage application is 4.75%. By the time the ad is printed and you go to the bank, the mortgage rate may be 5.25% for those with the best of everything.

So there are a lot of factors coming in to play when it comes to newspaper mortgage rate advertisements. Those factors include the date the ad was printed, the current mortgage rate, and you. These things will determine your actual mortgage rate. Since there are so many factors, visiting with a trusted mortgage professional upfront will allow you the opportunity to determine what is the best rate for your particular situation.

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Steve SchraderBachar is a local mortgage planning expert who resides in Iowa and provides service to the clients of his mortgage planning practice across the Midwest.  You can reach Steve at 1-515-289-4381 or 515-360-5197.