BUFFALO, NY - Mortgage and refinancing rates are at lows that haven't been seen in decades, but not all of the offers you see advertised on TV or online are legitimate.
Freelance musician Joe Mosello wanted to get a lower mortgage rate, but he says because his income is unpredictable and he co-signed his children's college loans, everywhere he turned he was told he was a poor credit risk. Then he got a mailing from a company in California.
Joe says, "They said that they could help us, and after hitting a brick wall with all these other banks and online things, we jumped at it."
Joe says the company promised to get him a lower mortgage rate but asked for $3,500 up front.
Tobie Stanger with Consumer Reports says, "In most cases it is illegal for a company to charge you anything before they have offered you a loan deal in writing and you have accepted it."
The Federal Trade Commission is investigating deceptive mortgage ads and has created fake ones based on real come-ons in order to warn consumers. Some red flags- promises like "guaranteed approval" or "low fixed rates" with no details. Or ads that look like they're from a government agency.
Consumer Reports says the best way to get a good loan from legitimate lenders - buff up your credit score by clearing up black marks and errors with the three credit bureaus, Transunion, Experian, and Equifax.
And pay off as much debt as you can. It's also worth checking the federal website MakingHomeAffordable.gov. For people like Joe, it may offer some good options.
If you need a mortgage, a good place to start is with a bank or credit union where you already have an account. And don't forget that you can get free copies of your credit reports once a year from AnnualCreditReport.com.