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Answers (11)
- Simon Mills, "Mills Realty"
- Contributions:1858
I don't think that is a sign of rates going up, but rather a market ploy to attract business. If rates go down they will happily re-fi their client for "little cost". I'm sure there is fine print that guarantees they are still making some profit.
- SoCal_Engr
- Contributions:5661
The company is, apparently, "not slow".
- Michael Emery, "MikeEmery"
- Contributions:7286
I use to go by a bus bench with an advertisement of a local agent who promised to 'sell you house within 60 days or I will eat it for breakfast'.
Okay, he didn't promise to eat it for breakfast, but he did promise to buy the house from you. In exchange you were charged a higher than normal listing rate that presumably went towards paying some indemnity should your house not sell in the contracted period of time. Plus there was undoubtedly some other boiler plate that protected the agent more than the seller.
It was a clever marketing gimmick that has gone the way of the buffalo as clearly it is not a sustainable business model in the current moribund market.
Okay, he didn't promise to eat it for breakfast, but he did promise to buy the house from you. In exchange you were charged a higher than normal listing rate that presumably went towards paying some indemnity should your house not sell in the contracted period of time. Plus there was undoubtedly some other boiler plate that protected the agent more than the seller.
It was a clever marketing gimmick that has gone the way of the buffalo as clearly it is not a sustainable business model in the current moribund market.
- Clay Branch, "Georgia Loans"
- Contributions:7832
So who is the well known company? I would like to read the fine print on their website. I agree with all other comments on this thread and if they start with a no closing cost loan, then they can churn out a refi every 6 months if the rate drops .250-.375.
- Michael Russell, "michaelrussell"
- Contributions:330
It is amazing that investors are putting their money in T-Bills at near 0% that have kept rates this low. Depending on what happens in the middle east we could see low 4's again.
- Andy Matejka, "tejks"
- Contributions:352
More like a sign that rates can't get much lower.....
- Aaron Crossley, "RMCVanguard Kirkland"
- Contributions:53
The funny thing about this ad is that pretty much any loan you get will come with a life time guarantee that the lender will call you and try to convince you to refinance if/when the rates drop far enough.
- Greg Cowart, "Roseville Loan Guy"
- Contributions:448
That's a really old marketing piece and has nothing to do with rates going up, or down...
A coach I had almost a decade ago taught me that, even gave me the template to give the clients a "coupon" to redeem when it happened. Although his was 1 year, not 3. Of course the fine print said pricing had to be at a certain level that is lower than it was when they originally locked. No one was losing anything. Maybe not a huge profit on the future refinance, but they are still making something....
P.S. MBS prices have gotten better pretty much every day for over two weeks. I feel there is a little more room to improve before the market has to decide what it wants to do next.
- SoCal_Engr
- Contributions:5661
@ Paul...
The one "saving grace" for you is that this ad was on secular radio. No mention of God involved.
;-)
The one "saving grace" for you is that this ad was on secular radio. No mention of God involved.
;-)
- Paul Mondello, "Paul Mondello"
- Contributions:2093
More blind mans bluff tactics. If the rates drop enough, of course they will refinance them again because if they do they will get paid again. If they don't, someone else will.
If the rates don't drop, then they are not on the hook at all...due to the 'if' part.
Was that commercial on Christian radio? If so, couldn't they just pray that the rates drop a bunch?
I love God but I can't stand Mortgage radio commercials... (the ones coming via bible thumper wavelengths are the worst)
- hpvanc
- Contributions:2567
There is also little risk if they stay in the same tight range. I assume they also have a disclaimer on the minimum rate reduction to keep from having to do them for very small amounts?
A sign that mortgage rates are likely heading up?
Even taking into consideration that they would only provide a higher-than-par rate to achieve the "little-or-no-cost", what are the chances that they would make this offer if they expected to have to make good?
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