We’ve been very critical about how mortgage referral sites love to advertise deceivingly low interest rates, see who bites, and make millions by selling your information to lenders. But what happens when you do bite?
Today we want to share a fascinating story of a technologist who is a veteran of the traditional homebuying/refinance process, decided to try a popular online mortgage referral site, and was ultimately left dissatisfied with their model.
Learning to Trust Again
The following is a verbatim transcription of the conversation we had with this veteran technologist, used with permission:
“I bought my first home in 2000, when I was 23 years old. Nobody thinks they’re part of the housing bubble until they look back ten years later thinking, ‘What the hell was I doing buying a house at 23?’
“At that time, I remember that there were some understandable hoops when it came to loan-to-income ratio. We were fresh out of school and there was a lot of loan-to-value ratio wackiness that was admittedly more liberal in 2000 than it is now.
“I remember working directly with a lot of brick and mortar banks, who I assumed might be able to get me a good loan, and finally settled on one. A couple years later, rates had come down markedly from around the 8% range in 2000 to about the mid 6% range, so we decided to refinance with another commercial bank.
“Being a very digital guy, working in technology research and development at the time, I found [Popular Mortgage Referral Site]. I started using them on my most recent purchase because, hey, ‘when banks compete, I win!’ So I hopped on the site, entered in a bunch of personal data and was provided a bunch of rates that looked amazing – but almost too compelling, because they were so much more superior to the banks I had previously dealt with.
“It turned out, of course, that a non-trivial percent of the providers didn’t have a lot of scruples. I ended up going with the second best looking deal on [Popular Mortgage Referral Site] and entered a carnival of paperwork and traditional phone calls that became decidedly non-digital due to the fact that I was ultimately sold to a lender in their referral network.
“The biggest kick in the pants? Some huge unexpected fees started to emerge, and I ended up walking away out several hundred dollars of non-refundable fees. After some post facto research, I found out that these guys were B- students with the Better Business Bureau. Needless to say, [Popular Mortgage Referral Site] left a bad taste in my mouth.
“Where that left me was in an uncharacteristically 1960s place of ‘I’m just going to go with this local guy who I know that doesn’t seem to be screwing me that bad.’ Everything else in my life was becoming digital, digital, digital, but there was this old school part of my life of going to this local guy who I talk to on the phone and he does some sort of craziness on the back end. In the end, it seems like a good deal: all I know is that my rate is down and my payments are down. In retrospect, I came to know that he’s buying loans from big commercial banks and charging me a comparatively ‘okay’ rate and getting by on the spread.”
We Deserve Better
Unfortunately, this is a very common story for people who use online mortgage referral sites… and the crazy thing is that these companies continue to grow! When you believe customers are only looking for the lowest interest rates, there’s an incredible incentive to mislead.
By the way, this odd paradox of achieving growth while continually misleading customers isn’t just confined to the mortgage industry.
As we’ve previously said, we’re as tired as most are of misleading mortgage referral sites that are looking to make a quick buck and pass you off to the next guy, without providing any real value.
That’s why we built a tool that walks you through the entire mortgage process, without letting you make any mistakes along the way, and without assuming anything about you other than that you are interested in securing the best mortgage for your specific needs.
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