After I posted this post, my readers corrected me in that ING Direct is actually a very responsible lender and company. I apologize for overreacting to the sub-prime mortgage. In fact, after some research, I am recommending readers to sign up to their online bank accounts.
With so many news articles about subprime loan and people being suckered into low teaser rates that ultimately reset, one would think that there wouldn’t be many ads about mortgage products that shouldn’t be sold to the general public in the first place. Today however, I got an ad from ING Direct advertising their low Adjustable Rate Mortgage (ARM) rate!
I was quite disturbed by this ad because it was these same products that got the United States into the whole housing mess in the first place. Sure, ARM is a great choice for mortgage for a small minority of people. However, no where in the ad do I see that this type of mortgage might not be for everyone. All I see is:
During the initial 5-year fixed rate period, you can save more than $8,200 in interest compared to a 30-year fixed rate mortgage. (Interest savings is over the first five years for a $235,000 loan) Start saving today with an Orange Mortgage!
If you just read this statement without knowing much else about mortgages, you would think that you are saving so much money. I don’t see anything in the ad that says what the interest rate is after it resets in 5 years, nor do I see anywhere that advises people to seek advice from professionals first because this is not for everyone (not that these so called professionals really tell you much truth judged from what’s been happening the last few years).
To make this worst, the reason why I got this ad is because I once had an online savings account with them. Did I even ask for a mortgage product pushed on me? If I was really stressed out about my mortgage payment, I might just fall prey to this ad and apply for this type of mortgage. To make sure we don’t spend enough time to research this, the ad says:
Apply by February 19, 2008 to receive One Low Closing Cost of $895.
Great.
Way to go ING Direct.
Promote or Save This Article
If you like this article, please consider bookmarking or helping us promote it!
Print Post | Email Post | Del.icio.us | Stumble it! | Reddit |
Related Posts
- Money Mailbox Friday – Countrywide Home Loans
- When Mortgage Company goes out of business
- 50 Basis Points Fed Rate Cut and Mortgage Rates
- Should I Pay Off My Mortgage Early
- Calculators
Subscribe! (and Get a Mini-Course with Free Registration)
Follow me on twitter! In addition, subscribe to grab free amazing content or take advantage of the newsletter to have content delivered to you. For starters, a 7-part mini course to help you spend less and be happy will be delivered to you when you subscribe!(Don't worry about spam, because we hate it as much as you do!)
{ 59 comments… read them below or add one }
← Previous Comments
I started doing business with ING Direct shortly after they opened doors. I had a direct, online-only, no frills savings account. I loved the interest rate, over 7%.
ING later came out with a mortgage product. We signed up.
Long story short, 5 years later, we try to take advantage of their simple “$750″ rate renewal, and we are told the cost to renew the rate increased to one months mortgage! For us, that’s about a 4.5x factor.
I used to love ING and their products, considered them innovative, even cutting edge. Unfortunately, my ultimate opinion about them is that they are simply luring in customers with high savings rates, low mortgage rates, the promise of easy/cheap rate renewals, then bait and switch.
A few years ago I would have violently disagreed with your article, but I believe you have been proven right.
Albert
Currently they have a $2500 cap on the amount this rate renewal costs, so it won’t get to the $3300+ price you’re referring to.
When you can decrease your rate to something available right about now, you are very likely to save a lot every month – unless you have recently refinanced.
I’m considering this rate renewal, but I need to read more about it. I assume right now that the terms are the same, except for a 3% penalty for paying off the mortgage within 1 year.
If I do go for it, I’ll make sure to update this comment.
Beware ING’s rate renewal. I signed up with ING just because of this feature 3 years ago. I took advantage of this last year and saved money.
When I called to sign up again 2 days ago I was told that I do not qualify for rate renewal at this time. Because of the crashed Arizona housing values I now owe more than my house is worth. They run stats and if you are in this situation, you are not eligibile for the rate renewal.
Housing values better turn around within 4 years or I am screwed
I’d be HAPPY if they did the rate renewal for 1 months mortgage. $441 is a lot cheaper than $750!!!
Hi,
I refinanced recently with ING in part due to their flat-fee rate renewal offer of $750. They have now changed this and it would cost me quite a bit more to renew.
It seems that this is dishonest at best and illegal at worst. I used to like ING but now I would recommend against it to anyone.
We were offered the rate renewal option for one month’s mortgage payment for us is $599 and got a 7/1 arm for 4.125 and our previous rate was 5.375 since we were unable to refi after a year at this rate since LTV was now 97%. Our new payment is $520 per month now. Very happy we were able to get this new rate. I have been with ing for past 5yrs with mortgage and online savings account.
Ing is great for those who have a lesser mortgage than there old $750 fee. Mine is currently at 4.95 and I can refi it for $660 to a FREE locked in rate of 3.875 for 5 more years or 4.125 for 7 years. I have to decide to accept the locked in rate by the 25th of the month. You can play the rate game and lock in every month if you like to secure your best chance of finding the bottom on rates. Plus they are very competitive with the ARM rates and if you keep working on extra principle payments during the length of your ARM, you will come out ahead as long as rates do not spike anytime soon.
I have been beyond frustrated with my INGDirect mortgage. (Note: I LOVE LOVE LOVE their savings accounts!!)
However, ING’s home retention department honestly wins the “worst customer service EVER in the history of the universe” award.
And sharing in the frustration: http://twitter.com/INGDirectSucks
I used to love ING too. now im almost convinved that they dont know which direction to go in. Within a few years they wil be taken over by someone else as well.
Anyway, they qualified me several months in a row (rates were going down so i wanted the best one) So now i want to renew and suddenly i dont qualify anymore?? Hmmmm. why? they wouldnt tell me. They didnt even call back to tell me. i called and found out that it was denied internally within a couple days. Where’s the customer service??? Where’s the courtesy? where’s the deal about them wanting work and abide by federal law in modifying rates? I have nothing else on my credit that wasnt there a couple months ago but i want to take advantage of the rate renew feature as a customer… They said no very harshly and said they would reconsider if i gave them a substantial amount of upfront cash to refinance… Ridiculous and absurd. I’m parting ways with them. Every account will be moved elsewhere. Sorry ING, if you would not have been a DICK about it, no one would be saying anything negative. but true.
← Previous Comments