Financing

[Adam Hunter]

A year or so ago there was a very long discussion on alt.mobilehome about lenders and dealers promoting lending programs that made it seem like customers were getting a low interest rate, but it was one of several tricks.

- a "variable rate" loan that goes up (never down it seems) 2% per year until the 3d year when it "only" goes up 1%. Of course you can always pay a penality and convert it to a fixed rate, but the rate you get is their current used rate which is usually 5% more than the "variable rate" you got originally. Slick huh?

- a teaser rate called a "step rate" that goes up automatically to a much higher fixed rate the second year into the loan.

- ballon notes that you have to renegotiate after 5 years,

- rates that you buy down. The dealers tell you this is great if you are planning on keeping your home for 5-7 years. Unfortunately, if you use NADA estimates of the value of your home after it becomes used, the math model shows it to be 23 years on an average loan before your home is worth what you owe on it.

Has anyone reading this posting board been taken in the same way? Write about it. It is time the lenders and the dealers stop doing this to people just to make a sale of you and others. Maybe seeing this here will help stop these unethical practices, especially if enough other people add to this original post.

Adam