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.
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.
Way to go ING Direct.