Before you buy from a flier you receive, make sure you ask whether any builder, mortgage company or title company contributed to the expenses of the advertisement.

A Warning About Certain Advertising

Unfortunately some people see advertising that appears too good to be true. This includes quoting ridiculously low monthly payments.  What’s the catch?

In many cases the advertising for new homes quotes what is called a “buy-down mortgage”.  In this mortgage, the start rate is a few points below the going interest rate.  During the second year the interest rate (and monthly payment) increases.  During the third year the buyer is hit with another rate (and payment) increase.

By that time taxes are based on a newly built home, rather than a vacant lot, so another payment increase.  (Some advertising actually quotes that low payment with “taxes included” when the taxes mentioned in the advertisement are based on the vacant lot.)

Unless you are in a special situation, such as a medical residency program, or an apprenticeship with scheduled pay increases, you should probably stay away from the buy-down loan.  Do the folks who get these types of mortgages know that they are in a situation which has scheduled, built-in monthly payment increases?

Now the question:

When you see that kind of advertising from other brokers, do you want to support those advertisers with your business?

Rates are near historic lows.  For most people it makes sense to buy a home.  If you see an ad which looks too good to be true, call us about it.  We will try to let you know what it means.  Deal with a company that talks straight talk.  

One of our specialties is finding people foreclosure values.  We do not want buyers we work with to go through foreclosure themselves in future years.