By TJ Trembley

Just like King Kong clutching the top of the Empire State Building... Bankrate, the “800-pound Gorilla” of online home loan rates is under fire. The Bankrate website draws millions of visitors, as it promises to give a listing of companies and their rate and cost offerings for mortgage loans, and it even passes that information on to most of America’s largest newspapers as fact. It claims to be a tool for the consumer, delivering only information and advice... but as many reputable mortgage lenders have known all along, consumers are discovering the reality of Bankrate to be a little different.

A lawsuit is in the works against Bankrate after hundreds of consumers complained about lenders who failed to deliver the rates and terms that were promised on the website. In fact, one lender actually told a Bankrate employee that a consumer would need a “direct pipeline to God” in order to qualify for the rates and terms they advertised on the site. Why would a lender post rates and terms it is unwilling or unable to honor? To lure consumers who want to believe that they are getting an interest rate or cost package that is significantly lower than that offered by the competition. And by the time consumers find out that they are not getting the package they were promised, they have likely wasted enough valuable time that they feel stuck and use whatever terms the lender hauls out.

Of course, there are legitimate reasons that the terms of a loan package can change mid-stream. When working with a reputable lender, it would generally be caused only by a change in information submitted on the loan application. Some examples of this include a change in credit, income, employment, debts, or assets.

So are there any reputable lenders on Bankrate? Yes, of course. And some of these lenders are the ones who prompted the lawsuits in the first place. As they were posting real interest rates and terms they could actually honor, they could see that consumers would instead be contacting the less-reputable lenders who were posting completely unrealistic rates and cost offers, knowing that the consumer might not discover the difference until it was too late. All mortgage lenders get their money from essentially the same places, so if there is a significant difference in quotes on identical programs, it pays to ask some questions.

Bottom line – the Internet can be a great place to gain information about basic trends and home loans, but the Bankrate lawsuit illustrates the need to work with a trusted advisor. A home loan is generally the largest financial transaction of your lifetime, so working with a real professional who can advise you on correct strategies and programs for your needs is a must. And like your mom or dad always used to say – you get what you pay for, and solid advice from a professional may cost more than a bargain basement operation.

Most importantly, remember that the absolute lowest rate and terms on the WRONG financial strategy or loan program for your life will prove to be far more costly than a competitive rate package on the RIGHT strategy that correctly fits your financial goals and needs.

For more information, please call or email Wealth Enhancement Mortgage Services.

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