Lending Tree Letter in the Mail
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I received a letter in the mail from LendingTree today exactly 14 days from the date I received my loan offers via email. It confirms my conclusion in my LendingTree review that they have excellent customer service and follow through. Included with the letter was a special “Refinance Brief” to further inform me. This brief might have been especially helpful to those who are not likely to read the PDF documents LendingTree offers at the completion of the application process. The information in the brief was accurate and did not distort facts to try to get you to close on the loan. Two weeks after the loan application with LendingTree, they continue to impress.
For those of you considering applying for your 4 free loan quotes from Lending Tree I have included the text of the letter here. Contact information abounds in the letter and it may prove useful:
You ‘re just a few steps away from closing on the mortgage refinance that’s right for you.
Dear Craig,
Congratulations! By completing your loan request at LendingTree you’re getting Lenders to compete for your business. That’s right, the power is in your hands! Now all you have to do is compare the terms of your offers and decide which Lender will win your business.
The next move is yours.
Simply visit www.lendingtree.com and look for the “Login to Your Account” area to review your options. After you decide on a Lender, just click that Lender’s “Select This Offer” button. Although there are no commitments at this stage, you’re one step closer to getting a great loan and this will notify your Lender that you are ready to begin working with them.
We’ll help you out with a little free advice.
When you ask the right questions, you make smarter choices. That’s why we’ve enclosed a special Refinance Brief filled with facts, tips and the latest information on refinancing. Refer to it often to help guide you through the process.
Remember…When Banks Compete, You Win!
At LendingTree, we’ve chosen some of the nation’s most reputable Lenders to compete for your loan. We monitor each Lender through customer feedback and believe they are fully capable of satisfying your financial needs. Plus, you can turn to the LendingTree Customer Care Team for help in finding the best loan for you.
Need Help?
The LendingTree Customer Care Team is here for you! Email us at customercare@lendingtree.com or call 1-888-272-1355.
Thank you for using LendingTree to help secure your loan. Now it’s time to make a move toward closing the right loan for you!
Best regards,
Tom Reddin
CEO
LendingTree, Inc.
P.S. If you would like our help or advice, email us at customercare@lendingtree.com or call us at 1-888-272-1355.
11115 Rushmore Drive Charlotte, North Carolina 28277
Tel: 704.541.5351
Fax: 704.541.1824
www.lendinqtree.com
Federal Interest Rates to Stay Put
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If you are one of the many consumers who purchased a home with an adjustable rate mortgage because of the very low initial rates they were offering a few years ago, then you might have been in for a shock when the interest rate started adjusting based on the whichever index it adjusts on. The Fed has been steadily raising interest rates by 0.25% for several years, until the last period.
A report came out today stating that the minutes from the latest Fed meeting show inflation is still a major concern for them. Here is what Paul R. La Monica wrote for CNNMoney.com:Â
Economists think it’s looking more and more likely that the Federal Reserve will hold interest rates steady for quite a while, maybe through all of next year. So investors hoping for a rate cut in 2007 may need to kiss that wish goodbye.
“I think the Fed being on hold through 2007 is an entirely plausible scenario,” said Chris Probyn, chief economist with State Street Global Advisors.
It appears there will not be any rate cuts any time soon. The Fed rate will stay at 5.25%, perhaps through all of 2007. A worst case scenario would be the record breaking deficits will lead to further inflation. With more inflation the Fed chairman will be forced to raise interest rates again.
So does that make it a good time to refinance? That depends. If you have an ARM that is currently adjusting, then it looks like your payments will stay the same at least for the next 6 months. But if the Fed decides to raise interest rates again, then more increases in your monthly payments are on the way.
At this point it is impossible to tell what might happen. Interest rates may rise, but they may fall as well. Most likely, they will be staying the same for many months to come. It looks like now may not be the time to refinance unless you are barely scraping by at the current payment you have to make. Then a fixed rate mortgage will offer the security and stability; the peace of mind you deserve.
50 Year Mortgages?
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That’s right, to entice those who would not ordinarily be able to afford to purchase a home, lenders are now offering 50-year-mortgages. These 50 year mortgages are not only enticing to those who think they cannot afford a home, they are also persuading many to purchase a home they could not afford with a traditional 30 year mortgage. When you spread the same amount of money across 50 years, the monthly payment is much more affordable. Those low monthly payments are easy to sell to the thrifty consumer, but are they really a good idea. The answer is — maybe.
50-year-mortgages are a good alternative to an “option adjustable rate mortgage”, or an option ARM. With this type of loan the consumer is offered several payment options each month. The problem is, if you choose to make just the minimum required payment, then the unpaid interest is added on to the principal. If the principal grows too much, then you might find yourself owing more than the initial loan amount. Basically, you keep making your payment but the amount you owe continues to grow. I don’t recommend this type of mortgage, unless you are a pillar of self-discipline in finance. It is all too tempting to simply make that minimum payment each month. A 50-year-mortgage on the other hand has the advantages of a lower monthly payment, but as long as you make your monthly payment the principal won’t grow.
You may want to consider a 50 year mortgage if you are already considering an interest only mortgage. Interest only mortgages allow you to pay a low monthly payment for a set period of time, but when that time expires you will be required to start paying off the principal with a much higher payment each month. The 50-year-mortgage offers the advantage of low monthly payments without having to face these large payment increases.
The one reason you may want to avoid a 50-year-mortgage may be that you want to build equity in your home. One of the main reasons Americans are so convinced that home ownership is far superior to renting, is because it offers the opportunity to build equity. Simply by paying for your mortgage payment each month, you are essentially saving some of that money in the value of your home. When you pay rent to someone else the money is lost; it is gone forever. This being one of the main attractions of home ownership, the 50 year mortgage minimizes your ability to build equity. This is because the percentage of your monthly payment that actually goes to principal is very small.
So if you are mainly interested in low monthly payments, then the 50 year mortgage may be right for you. It offers low monthly payments with minimal risk in a stable traditional style mortgage. If you want to build equity in your home go for a 15 year, 20 year or a traditional 30 year mortgage. These offer greater opportunity to build equity in a shorter amount of time.
Current Mortgage Rates – Refinance Now?
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I was checking around to see what the current mortgage rates are. I wanted to compare them to the mortgage refinance rates one year ago this month. This would tell us whether to believe the recent hype in the media about rising rates, and now being a bad time to refinance your mortgage. For current rates I am using the rates I was quoted through LendingTree.com a couple of days ago. They ranged from from 5.625% to 6.125%. This covered both fixed rate mortgages for 15 years or 30 years and 5/1 adjustable rate mortgages.Â
So knowing the current interest rates for mortgage refinance, what were the rates one year ago this month? What were mortgage interest rates in November of 2005, when refinance was in decline but still very popular. Here is what I found at BusinessWeek from November of 2005:
5.83% – Lowest rate from Bankrate.com
6.37% – Lowest rate from Freddie Mac Corp.
6.44% – Lowest rate from HSH Associates Inc.
Peter Coy at Business Week said in November of 2005 that Bankrate’s most recent press release quotes their current mortgage rate at 6.42%. Wow, that is a big difference from 5.83%! He contacted a financial analyst who explained that the higher rate is an average of the top 10 metropolitan markets, while the lower rate is the rate offered by Bankrate’s own advertisers.
So mortgage rates in November of 2005 ranged from 5.83% to 6.44%, while the Lending Tree network of lenders is quoting an interest rate range from 5.625% to 6.125%. Check out my Lending Tree Review to read more about the rates they quoted me.
So, contrary to what the media has been telling us, it seems that now is a much better time to refinance your mortgage than November of last year. The Fed has stopped raising interest rates for the time being, and they may decide not to raise the rates again next time. If you have been waiting for the right time to refinance, it seems the time is now. If you have been trapped in an ARM that is just starting to adjust, then it may be the safest bet to refinance into a fixed rate mortgage at this time. This will protect you from future interest rate hikes.