When Pigs Sing…….
In my day job, doing mortgages, I am finding it more and more difficult to deal with the misconceptions consumer’s are getting today about how financing works. Advertisements for 100% financing and interest-only programs are everywhere. Advertisements offering loan programs for those just out of bankruptcy or have poor credit are just as popular. Advertisements with teaser rate offers are a constant.
Where is the reality? Reality is that you have to have adequate credit, some money for closings costs at the very least and a property that you can afford.
Every day we have another potential client come through the door believing he/she can get a loan with no credit, no money and have microscopic payments. Unfortunately, they’ve bought into the ideas the advertisments sell and think buying a $250,000 house and having a $800 a month payment with no money down is a possibility. It isn’t.
If you want to be a homeowner, you need to be realistic. Houses are expensive purchases and long-term investments. You don’t go into a deal of this size without some planning. You have to save some money. You have to work on having good credit. You have to accept the difference between what you want and what you can afford.
One of my loan officer’s put it succiently, “When I was young and saw the Valleydale commercials with the marching pigs singing “Hoooray for Valleydale”, I knew it wasn’t real, it was an advertisement. Pigs can’t sing! So why do people think just because it’s advertised that it’s gospel?”
When seeing, hearing or reading any advertisement, one should always exercise a little common sense. The adage “if it’s too good to be true, it probably isn’t” is a good “rule of thumb.” Otherwise, singing pigs would be everywhere and everyone would own their dream home and have no mortgage.
Dar, this sort of belief in the hype around financing reminds me of the trouble many of friends encountered through signing up for credit cards while in college. They simply weren’t educated well enough at ages 18-20 about the risks of what they were doing, and what those asteriks and fine print really meant. I know of a few people who are still digged their way from under credit card debt incurred during their school years. Mind you, these people weren’t stupid while in school - it’s just advertisers knew how to play on their desires and weak spots. It sounds like financing in some scenarios is no different.
Comment by Jen — June 15, 2005 @ 2:47 pm
I agree - if I knew in my youth what I know now, I’d be much better off.
Advertising is, by its very nature, designed to SELL you something. It’s easy to sell the great American dream of a home of your own - the advertiser, after all, isn’t the one having to make a payment on it. It’s a cold, hard reality to hear you’ve been denied, but it *is* a consequence of not properly educating our kids and younger generations about how money works.
Thanks for continuing to share this, Darlene - as you said when we first met, people *need* to know this stuff!
Comment by Sue — June 15, 2005 @ 6:38 pm