“It’s For Your Own Good”
February 8, 2011 § Leave a comment
I got a call from a new client today in a rather distressed state.
She went to her bank for a pre-approval a few months ago. They gave her a variable rate mortgage at 2.6%. When she put an offer on a house last week the bank’s mortgage representative came back saying “You are now approved at 4% for a 5-year mortgage.”
“Why would the rate change?” She asked.
“I am protecting you. You’re a first time buyer and the variable rate is not good for you. Fixed rates are more stable and I think you should take a fixed rate term.”
Protection? Since when has the bank been in charge of your choices? What happened to giving the pros and cons and weighing the options? As a broker, I do just that and allow the client to choose what they think is best. After all, they have to live with the decision and make the mortgage payments. Not me – nor the mortgage rep. at the bank.
We’ve had two government interventions in the last year where mortgages are concerned. What’s next? Will the banks decide where we should live?
My client is a professional woman with 20% down payment, excellent income and great credit. I think she can make her own decisions.
Don’t let this happen to you. Consult with your broker – they work for you, not the lender.