When I get this question, I try to shift the conversation away from “Which strategy is best?” and towards “Are you sure you want to pay off your mortgage early at all?”  While I think it’s admirable to get out of debt and stay out of debt, I don’t believe “paying off your mortgage early” should be your number one financial priority.

“Paying off your mortgage early may NOT be

the smartest financial strategy for you.”

Instead, I believe you should use your financial resources to prepare for the future and all those mean, nasty twists and turns that life can throw at you.  I’m not suggesting a gloom-n-doom approach to the future, but we just don’t know what will happen, and paying off your mortgage early may NOT be the smartest financial strategy for you.

Focus FIRST on Building Liquid Assets 

My advice is to focus first on building liquid assets (resources you could access with little difficulty to pay for stuff) vs. paper wealth (resources that cannot be accessed easily).  Equity in your home falls under the “paper wealth” category because it is difficult to access in an emergency and you may not be able to access it at all when you really need it.

An example of what I’m talking about came across my desk recently.  The applicant wanted to refinance his home to access some of his paper wealth.  For several years, he had been paying extra on his mortgage and only owed about $70,000 on a home worth around $400,000.  On paper, things looked good, but…

…he was facing total financial collapse 

I’ll leave the gory details of his set-backs out of my story, but when he came to me, his wife had left him and the divorce had drained his bank accounts, he had lost his ability to work due to an injury and lost his business, he was 6 months behind on his mortgage payments, and he was facing total financial collapse.  He needed me to help him access some of his $330,000 in equity (paper wealth) to live on. 

All that “paper wealth” made his home an enticing target.

But because his credit scores were bad and his income was gone, he didn’t qualify for a new loan.  The bank who owned his mortgage – that same bank he had been paying extra to all those years – wouldn’t help him.  I’m sure they saw his home as a great foreclosure opportunity – all that “paper wealth” made his home an enticing target.

His only solution was to try to sell the home before it was foreclosed on in order to keep some of his “paper wealth”, but since he had been so determined to keep his home – not wanting to uproot his children who’s mother had just abandoned them – he failed to act quickly enough and now it was too late.

I wish I could tell you his story had a happy ending, but it didn’t. 

What I can tell you is that if this man had had $330,000 of “liquid assets” instead of $330,000 of “paper wealth” – his story would have turned out much differently. 

So if you are prepaying your mortgage now, but don’t have enough liquid assets available to handle life’s emergencies, please remember: 

You cannot go grocery shopping and tell the cashier, “I don’t have any money, but my

mortgage is paid off”.  Even on double coupon day, that won’t buy you any fruits and veggies.

“Should I pick an adjustable rate mortgage, like a 3/1 or 5/1 ARM, or go with a 30 year Fixed Rate?”  How many times has a buyer or borrower asked you that question?  How do you help them choose in a way that makes sense to them?

I’ve found that “Pizza” is the best illustration to use to help them understand this question.  If I give this illustration, it all of the sudden makes sense to a borrower and allows them to make an informed and confident decision.  Here’s what I’m talking about:

When you go in to a pizza parlor to order a pizza, you’ll be faced with the decision of “What Size” to choose.  Some places have only a couple of sizes to choose from, other places have as many as 6 sizes to pick from.  How do you choose?

Get Maximum Value for your Money 

Well, if you’re looking to get maximum value for your money, you can start calculating the cost per square inch of each size.  Since pizzas are round, you’ll have to pull out your handy geometry cheat sheets (I can still see mine faintly etched on my forearm – where I wrote down the formulas to help me get through those high school math tests) to get through the diameter, radius, pi-r-squared issues.

You’ll soon discover that in most pizza places, the larger sizes cost you less per square inch than the smaller sizes.  (This is why, when buying for large groups, you avoid buying individual personal-sized pizzas for each person and instead go for the largest sizes for everyone to share.) 

Why would you EVER buy a smaller size? 

After you’ve figured out that you get more value per square inch out of the largest sizes, why would you EVER buy a smaller size?  The answer, when buying pizza, is obvious to you.  If you’re by yourself, for example, and buy an extra large pizza because it’s the best per-square-inch value, but eat only a few slices and throw the rest away – you’ve wasted your money.  Yes, you bought the best “total” pizza value, but by NOT USING the entire pizza – you wasted your money. 

The answer to your pizza buying size question, therefore, comes down to “How much pizza will I use?”  To get the most for your money, you should always buy the largest size you will actually use.  And so it is with choosing a mortgage ARM or Fixed Rate product.  Huh?

Is a 30 Year Fixed Rate ALWAYS the Best Value? 

The assumption I will ALWAYS use when comparing an ARM with a Fixed Rate mortgage is that over the entire 30 year term, the 30 year Fixed Rate loan will cost you less than an ARM – which tends to start out with a lower interest rate for a few years and then will eventually adjust higher.  So if you’re going to keep the loan for the entire 30 year period, a 30 year Fixed Rate loan is – just like the extra large pizza – the best value per year (per square inch).

BUT, if you take out a 30 year Fixed Rate loan and only keep it for a few years, it is just like buying that extra large pizza, eating a few slices, and throwing the rest away.  If you ABSOLUTELY KNOW that you are only going to keep that mortgage for a few years, then you need to give serious consideration to choosing an ARM if the rate you can get is less than the 30 year Fixed Rate.

Be sure to buy ENOUGH! 

A final word of caution:  Be sure to buy ENOUGH pizza to start with.  It is not good to find out you don’t have enough to feed everyone because it is a hassle and expensive to go back and order some more after people have already started eating.  Likewise, be sure to get ENOUGH term on your ARM to start out with.  If you think you’ll stay in the home for 3 years, but aren’t 100% sure, you may want to get a 5/1 ARM to start with – just to be sure you’ll have enough. 

Don’t get caught short – almost EVERYONE expects rates to rise significantly in the future, so don’t get stuck with a house payment you can’t afford.

My business is mortgage lending and I love the whole business of money.  I hope you’ll feel my passion for people, my hate for the shackles of excess debt, my anguish for those who are struggling, and my love for history – especially the history of success and triumph!

As you read the articles, my hope is you’ll be entertained, educated, and enlightened.  There are suggested resources you can use to help you along the way.  I’m constantly posting new articles and new information, so please check back often.  Thanks for reading!

The stories I write, with maybe some historical pictures of either the home itself or the people or events I write about, end up on the backs of listing flyers, on blog sites, linked to MLS listings, displayed in the home during open houses, and are used to blanket the surrounding neighborhood, etc. The intention is to raise a little more awareness of the listing, create some intrigue and mystery or elevate the historical significance of the home, and most of all – to increase the emotional attachment a potential buyer might have for the home.

Who are these people?

It is amazing what you can find with a little internet research. I often start my search with County Records – available in most communities on-line. Go through the sales history of the home and make note of sellers and buyers names. Who are these people? Find out! Google the names, check the archives of local newspapers, check out the public library.

If the names of the people aren’t “significant”, then what was happening during the time the home was built or sold or what changes has that neighborhood seen over the years. There are stories that can be told about almost any home.

What a Wonderful Tribute!

A recent example of such a story is below. This took me a few hours to put together. I knew absolutely nothing about the home when I started, and the agent knew very little himself. I wrote a rough draft on what I could find out about the people and then asked the agent to “get approval” for the story from the seller (which was the daughter of the previous owners). Once she saw the story we were trying to tell, she was more than willing to share extra details and give us a few more tidbits. With her input and the research, I ended up with this story.

And after blasting it out to my contact lists and putting it on my blogs and blanketing the neighborhood along with open house invitations, the listing has become a hot topic around town. I have no doubt that this story will help find a buyer sooner than a listing with no story.

(And just think how this real estate agent can now use this listing to gather in more similar listings around town! If you don’t believe people want their stories told like this – you are wrong! What a wonderful tribute and gift you are giving when you include this strategy with your listings!)

Here’s the story

(I dressed it up on the flyers with pictures and graphics of course):

Rose Bowls, Blueberries, Daffodils, and Silent Snap-Counts

The last time this home came on the market was in 1947, so when I say that this “For Sale” offering is truly a rare and special event, I don’t think I’m over-exaggerating the unique opportunity that sits here before you. The home and surrounding land is known to local residents as “The Bond Blueberry Farm”, and this home has a wonderful place in the history of the Puyallup Valley and beyond.

Chuck Bond was a star for the University of Washington football team – one of many such UW stars to come from Puyallup High School over the years. Chuck was Captain of the Huskies team that faced the University of Pittsburgh in the 1937 Rose Bowl. Chuck was a defensive tackle but as good as he was, he and his teammates were unable to stop the Panther’s “Dream Backfield” of Bobby LaRue, Frank Patrick, Bill Daddio, and Marshall Goldberg who rolled up 254 yards and two rushing touchdowns enroute to a 21-0 victory.

One thing that was interesting about that Husky’s team was the way they won a key victory over powerhouse USC to secure that Rose Bowl birth. USC’s homefield advantage featured rowdy fans with megaphones and a HUGE marching band that would play as loud as possible while opponents had the ball, making communication and play-calling very difficult (Sound familiar Seattle Seahawks fans?).

So the Huskies came up with a unique system of silent hand signals to call plays – much like many of today’s NFL teams use. Years later, when asked about the “new” system of silent snap counts that teams were putting in to combat the noise levels at the Kingdome, Chuck responded, “We used them in 1936 to help us beat USC. You’d think that now, 50 years later, the pros might have perfected that particular tactic.” After graduation, he was drafted and played 22 games as an Offensive Tackle for the NFL Washington Redskins.

Chuck returned to Puyallup, married his sweetheart Francis, and in 1947 they purchased this home and started their blueberry farm. (Oh, and their son, Chuck Jr. later played for two UW Rose Bowl Teams in 1961 & 1964 – also playing Tackle. They were the first Father/Son Rose Bowl players in UW history.)

Chuck and Francis worked hard raising and selling their blueberries together, but they also loved to play hard too. They were avid tennis players and formed a formidable doubles team. The family joke was that Chuck would use his long arms to cover most of the court but he made Francis do all the running to get to the tough shots.

In 1971, the Bonds built the Puyallup Valley Tennis Club on a section of their property. They hosted tournaments and some of the local high schools would use the courts for matches and try-outs over the years. After Francis passed away, Chuck met Mary in 1979 who also loved to play tennis and she became Chuck’s new double’s partner and second wife. The Puyallup Valley Tennis Club later became the location for Puget Sound Gymnastics – which is still using the facility today.

Chuck and Francis (and Mary) were active supporters of Puyallup, including our famous Daffodil Festival. They were an important part of Puyallup history, and their beautiful brick farm home with the amazing interior woodwork, lots of square footage, lush acreage nestled into a wooded hill (the perfect combination of “secluded” and “close in”) is an important example of local historical architecture.

Don’t miss your chance to own this home! Make an offer today. Last offered For Sale in 1947 – If history holds true, the next time you’ll get an opportunity to own this home, if you miss out this time, should be around 2,071.

(Please contact me for your financing needs. I’d love to help you write the next chapter of this home’s history!)

In one of Andy Rooney’s books, he had a chapter about what’s wrong with American society (actually, that doesn’t narrow it down much because most all of what he wrote had something to do with what’s wrong with American society). But this particular chapter really hit me as being a “Wow, I never thought of it like that before.”

Boys Don’t Tinker Anymore

Rooney said that the reason our society is headed in the wrong direction and why our economy is in danger of collapsing someday is because “Boys don’t Tinker anymore”. He went on to describe growing up in an America still feeling the effects of the Great Depression in the 1930′s. When something broke, you fixed it. Nothing got thrown out until it couldn’t be held together any longer. Every town had a local fix-it shop, with clerks who actually knew how to fix things. Every garage was stocked with hand tools, clamps, vices, spare parts, and duct tape.

When something finally did need replacing, the old unusable item was given to the boy in the family who would tinker with it – maybe getting it to work again, maybe using the parts to make a go-cart or a rocket ship to Mars. Something broke and any eight year old boy with a Philips Head and glue could get it going again. “Assembly Required” meant “forget these directions” and feeling proud if you didn’t need all the parts to get it working.

Extra Parts = Extra Points!

But boys don’t tinker anymore today, Rooney points out. Something breaks, it gets tossed in the trash. Or it doesn’t break – it’s just old – so it gets replaced by the newer model anyway – because ya gotta keep up with the newest thing. Fix something? Are you kidding? We don’t fix things anymore. Don’t believe me? Quick, give me directions to the nearest fix-it shop.

Don’t Sell Me No Good Bargain!

This week, I read an article about First Time Homebuyers, and I immediately thought of Andy Rooney’s tinkering observation: The article said, “A recent survey found that first-time homebuyers’ expectations may be too high relative to their current financial buying power. Up to 81% of today’s first-time homebuyers consider move-in conditions very important, with only 7% looking to purchase homes they could buy at a lower price if they renovate themselves.” (Seriously? Only 7%???)

Whatever happened to the “buy the ugliest house in a great neighborhood” school of real estate investing? Put a little love and elbow grease into your ugly home purchase and watch it become something you love AND grow in value. Instead, we’re too impatient for that. The home has to be perfect before we move in. We spend more than we can afford. And all because we just don’t know how to tinker anymore. Andy Rooney wrote that book back in the 1980’s and warned of a doomed society with no tinkerers. Hmmm…

Huge Opportunity for Tinkerers!

It’s time to get back to smart investing, smart spending, smart home buying – so if you have “tinkering” skills, what a HUGE opportunity for you to buy a bargain! AND you’re only competing against 7% of the other first time homebuyers out there on those fixer-uppers. Let those other 93% fight over the new construction and perfect condition homes and pay too much for them. You can pretty much name your price on something less than perfect.

The housing market is the same way. For many years, it didn’t really matter what house you bought. Real estate values were going up so fast – you just needed to buy “something”, and if you didn’t like it – so what? Keep it for a little while, flip it for a profit, and buy what you really want later. Real estate was a no-lose investment. Buy it and it’ll be worth more tomorrow…

Real Estate “WAS” a No-Lose Investment

But times have changed, and there’s a “Flight to Quality” going on in real estate now too. Buyers are being much more selective about what they buy – which is the way it should have been all along. And the best “Flight to Quality” buying technique is the old “Buy the ugliest house on the block” strategy.

If you’ve got fix-it-up skills, you can still use real estate to make yourself wealthy. You get the ugly house in a good neighborhood, fix it up to the same quality level as the rest of the homes around you, and you’ve just created extra Quality – extra Value. This was an extremely common home buying and wealth-building strategy for many years in America, but is rarely used these days. So again, if you’ve got the skills, you have a HUGE advantage in real estate right now.

No Fix-Up Skills? No Problem…

Even if you don’t have the skills to do-it-yourself, there are terrific opportunities to pick up fixer-upper distressed properties at bargain prices and using rehab financing and construction loans to pay for contractors to do the work for you. Ask your lender about the FHA 203K Streamline Rehab Purchase loan (Whew! Big name). You can use an FHA loan to buy the home and finance an additional $35,000 in home repairs above the purchase price. Find a home that needs a little love, hire a contractor to make it good as new before you even move in, and you can end up having 10-20% equity in the home right off the bat. Very cool! And a GREAT way to buy a quality home at a bargain price – a great way to build wealth! (Not to mention helping to renew a neighborhood.)

Buy Low, Sell High – Some Things Never Change

So why don’t more people buy their home this way? Stay tuned for the next article titled “Whatever Happened to Buying the Ugliest House on the Block?” (after Christmas.) Just remember, real estate has helped build more fortunes in the country than anything else, and even during a downturn in the overall market – you can still find great bargains and build your wealth, if you buy low and sell high. Just make sure what you are buying low has good potential to be worth more later on.

I also told you, in a kind of snotty way, that getting this $500 in the bank was the first step towards home ownership, and if you weren’t able to do this first step, then you should give up your dream of owning a home.

Well, that was down-right RUDE!

Yes, it was rude – but it was also true. It is easy to preach at you about things you should be doing, but it is quite another to offer practical solutions. And I’m a practical solution kind of guy. Step one was to create the cushion in your checking account. Step two and three are below.

Three steps ANYONE can do that will put $500 in the bank right away. So, again, if you can’t manage to get the $500 in the bank – even after I show you this anyone-can-do-it 3-step plan, well, just keep renting and miss out on the most proven wealth-building vehicle (home ownership) that there ever was and ever will be. (Oops! I got snotty again there!)

Step 2 to $500 in the Bank

Step 2 may seem silly to you, and right off you’ll think, “Oh, that will do me a lot of good – NOT!” but come on, just play along! How many other debt management, wealth-building, how to buy a home articles have you read that haven’t gotten you anywhere? I’m guessing, quite a few. But this step is so stinking easy to do, and it will get you STARTED, that you just need to do it. If you don’t have a pile of cash in the bank right now – then DO THIS!!!

Here’s what you do: Go through all your coat pockets, cups in the laundry room, dresser drawers, car ashtrays, couch cushions, etc., and gather up all your loose change. (Loose change? Are you serious? Hey, just do it – you’ll be shocked how much change you have. And it doesn’t even matter how much you have. 37 cents? $20? Doesn’t matter.)

“I’d like to open a savings account with this $2.54…”

Once you’ve gathered up your coins, head to your bank and get some of them free paper coin rollers. While you’re there, find out about how to open a savings account – any rules you need to know. Then head home and roll the coins up. You’ll use this as the opening deposit in your savings account. (Yes, most banks will let you open a new savings account for as little as $1.00.)

How does this help you? It gets you started. You’ve actually taken an action step. You’ve started to build real momentum. AND you’ve created a “landing pad” for the next wave of deposits you’ll be creating with Step 3.

Step 3 – Remember, ANYONE Can Do This

In Step 3, you’re gonna part with some junk. Find your old record albums, cassettes, video games, VHS movies, books, and get ready to sell them. You can use Ebay or Craigslist or try taking your books to a local used book store and see what you can get. Look for other items that may have some value – old coin collections, jewelry, tools, Boy Scout merit badges. Get these sold! (Come on, do you want a house or an apartment filled with junk?)

Don’t stop with just YOUR junk. Ask your relatives and friends if you can clean out their junk for them – if they know why you’re doing it, they’ll be happy to help you out and provide you with lots of cool stuff.

If you don’t know how to do Ebay, etc. yourself and don’t want to learn (Hey, did you miss that part about “anyone can do this”?) there are plenty of brick-and-mortar business who will sell your stuff on Ebay for you and take 30% of the profit – that’s better than nothing if you just can’t do it yourself for some reason.

Let Your House Seeds Grow

Your goal is a minimum of $500. Don’t stop until you get $500 in that new savings account. Once that $500 is in your savings account – DON’T TOUCH IT! That $500 is your house “seed” money. Plant it and it’ll grow into a home. Pull the seeds out of the ground before they grow, you got nothing but worthless dirt.

What did that take you – a day or two? A week? Did you enjoy doing it? Many people supplement their incomes nicely doing Ebay-like selling. Ebay.com has free tutorials that show you step by step how if you want to learn. This one skill could get you your house faster than you can imagine. Something to consider doing more of, but at least do it this one time – it’ll feel like progress! Do it!!!

If this sounds like you, or maybe your situation isn’t nearly this severe but things are still tight, the first step to financial freedom and getting yourself ready to buy a home is to start with getting $500 in the bank. And I don’t just mean that you deposit your paycheck and then spend it. I mean $500 that sits there, doing absolutely nothing. Month after month, your bank balance NEVER goes below $500.

And here’s the harsh part of this lesson: If you can’t do this, you shouldn’t buy a house and you shouldn’t even think about it anymore.

But, I’m not telling you that you have to be able to do this right this minute. It’s okay to take a few months to get there if you need to. But start right now getting yourself to this position. Make it a priority. Think of it as your first test. If you can quickly and easily pass this test, you’ll be in good shape to buy your home very, very soon. If you struggle to pass this test, then realize you’ve got a long battle on your hands to get yourself ready to take on a mortgage.

Sadly, You’re Not Alone…

Why $500? Well, first of all you should realize that if you don’t have $500 in the bank, you are not alone. A recent survey revealed that over one-third of adults under the age of 35 did NOT have even $500 in the bank (Percentages improved slightly with older age brackets, but not much).

When you live this way, you know about the devastating effects of overdraft fees, late charges, and the helplessness you feel whenever an emergency strikes – car breaks down, appliance failure, medical emergency, etc. Any one of these things can wreak havoc on your budget for months before you can catch up again – that is IF another emergency doesn’t hit you again, and right away too.

We’ll look at ways to build this $500 cushion in upcoming articles, but to get you started, here’s your first assignment:

When you get your next paycheck, write yourself a check for $100.

Don’t cash the check, but do deduct it from your registry – you’ve now given yourself a $100 cushion in your checking account – enough to prevent bounced checks. Maybe instead of cashing it, you put it a frame and hang it someplace where you’ll see it often as a reminder of what you’re trying to accomplish? (If you use a debit card and rely on the ATM balance, you’ll need to mentally subtract this $100 each time you see your balance.)

Honey? The Show Starts At 6:45 – Don’t Be Late!

This technique is the same principle my wife uses to make sure I get someplace on time – she’ll tell me something really starts 15-30 minutes sooner than it does, creating a little time cushion, and that way I always seem to show up on time. So create a little checking account cushion and it’ll likely save you $100’s over the next year in banking fees, and it’ll get you that much closer to buying a home.

In the next article, we’ll continue to show you how to grow your cushion from $100 to $500 …

Rule #1: If you can’t afford a standard 30 year mortgage, you shouldn’t buy the home.

Let me put that more snottily: If you want to live in a $300,000 house, you should be able to afford a standard $300,000 house payment.

Many of my readers have had financial struggles or are just trying to get ready to buy their first home and want to make sure they do it right. Trust me when I say that doing it right means buying what you can afford now, and not relying on your financial situation or the market loan conditions improving in the future. (If things do improve – great! Just don’t bet the farm on it.)

People are losing their homes now because they used risky loan products to buy a home they really couldn’t afford and they hoped that values would go up, their incomes would double, or rates would drop. None of these hopes were guarantees and when they didn’t happen, the foreclosure roles increased and many credit and financial situations were ruined.

Rule #2: Get a fixed rate for as long as you plan on staying in the home.

The “standard” fixed rate loan is for 30 years, and this is by far the most common type of loan being done today. But if you are very confident that you will only stay in your new home for a short period of time, then check out the adjustable rate loans that start out fixed.

For example, if you know you won’t stay in the home for more than 3 years, then you can get a loan where the rate stays fixed for 3 years or 5 years before it starts adjusting. If the rate for these 3/1 or 5/1 loans is less than the 30 year fixed loans, then they may work for you. But you need to be pretty certain that you will indeed be moving before your rate starts adjusting or else you should just get the 30 year fixed loan.

Rule #3: Prepaying your mortgage is usually a bad investment.

There are many programs and schemes that encourage you to pay extra towards your mortgage each month to pay it off early – saving your thousands in interest over the life of the loan.

But this “extra” money is usually better utilized by investing in your retirement. You should easily be able to earn a higher rate of return over the long run by investing in the financial markets or buying more properties than you can by eliminating mortgage debt. Plus, all that interest you are eliminating from your mortgage is no longer tax deductible, so you miss out on the biggest government subsidy there is.

So, max out your 401K’s and IRA’s and college savings plans and buy some investment properties before even considering prepaying mortgage debt. And I mean, don’t even round up to the nearest $100. Save, save, save, invest, and save some more. Don’t get caught with zero mortgage balance and zero savings.

Recently, these 3 agencies have rolled out a new product that they are selling within the mortgage industry – something known as “trigger leads”. For a starting price of around $25,000 per year, mortgage companies can acquire the rights to be alerted whenever anyone within a certain zip code (or some other criteria) has their credit report pulled by a mortgage company.

Pulling Your Credit Report Equals More Telemarketers – What a Joy!

You see, in order to do your loan or help you fix your credit, your loan officer has to pull a credit report from these 3 agencies. The minute he/she does that, alerts are sent out to those other mortgage companies who have purchased the rights for your area. If your phone number, mailing address, and/or email address is on record at the bureaus, you’ll begin getting hammered with mortgage offers.

There is nothing you or your lender can do about it. Your lender has to pay the credit bureaus for your credit report, and then the credit bureau sells this information to these other places, and then the other places start filling your mailbox or calling you during dinner time. Quite frankly, it’s a disgusting practice, but there is nothing illegal about it and the credit bureaus enjoy the extra profit at the expense your privacy.

For now, that’s the way it is. Hopefully in the future, things will change. I suppose the next “product” (read, “extortion”) that the credit bureaus will start selling to mortgage lenders is your privacy, i.e. If your lender doesn’t want all of his/her competitors notified of your business, it’ll require payment of a hush-hush fee. That’s not available now, but I promise it will be soon.

What you need to realize about these “trigger lead” offers coming in:

• Regulation of deceptive advertising in the mortgage industry is very poor, so expect to see some “amazing” offers as they try to get you to apply with them.
• Many of these offers are disguised in such a way that you may believe they are coming from or authorized by the lender you’ve applied to.
• Truth in Lending laws are weak and don’t protect you very much at all.

So what do you do? Do you ignore all these offers and just trust that you are getting the best deal by sticking with the lender you applied with? Well, hopefully you’ve chosen that lender for reasons other than they had the lowest rate on some internet site and by this time, you’ve developed a relationship and a trust level. I wouldn’t throw that away for a .25% better rate from some trigger lead quote – especially when lending laws really don’t prevent outright lying to borrowers up until the final loan documents are printed and signed.

Trigger leads are disgusting and should be outlawed. Until they are, let’s help make sure they aren’t profitable for the buyers and seller of them by hanging up on anonymous phone solicitors and ignoring that mailbox full of “what a coincidence” loan offers that come a few days after your credit is pulled.