They arrive in the mail all the time and keep popping up on your computer screen-home-refinancing ads that promise rock-bottom mortgage rates and easy approval.
They're tempting, but Consumer Reports says beware-the offers can be misleading.
Freelance musician Joe Mosello wanted to get a lower mortgage rate, but he says because his income in unpredictable and he co-signed his children's college loans, everywhere he turned he was told he was a poor credit risk. Then he got a mailing from a company in California.
Mosello says, "They said that they could help us, and after hitting a brick wall with all these other banks and online things, we jumped at it."
Joe says the company promised to get him a lower mortgage rate but asked for 35-hundred dollars up front.
Tobie Stanger of Consumer Reports says, "In most cases it is illegal for a company to charge you anything before they have offered you a loan deal in writing and you have accepted it."
The Federal Trade Commission is investigating deceptive mortgage ads and has created fake ones based on real come-ons in order to warn consumer. Some red flags-promises like "Guaranteed approval" or "Low Fixed Rates" with no details. Or ads that look like they're from a government agency.
Stanger says, "The FTC and the Consumer Financial Protection Bureau have pored through hundreds of ads, and recently they warned about 30 companies that they may be breaking the law."
Consumer Reports says the best way to get a good loan from legitimate lenders-buff up your credit score by clearing up black marks and errors with the three credit bureaus, Transunion, Experian, and Equifax. And pay off as much debt as you can.
It's also worth checking the Federal website Making HomeAffordable.gov. For people like Joe, it may offer some good options.
A good place to start to find a legitimate commercial lender is with a bank or credit union where you already have an account.
And don't forget that you can get free copies of your credit reports once a year from AnnualCredit Reports.com