There’s a very popular news radio station in Boston that I listen to while driving since I can get traffic reports. At times, the news can get repetitive, especially on a slow news day (although there has not been one of those lately). What can also be repetitive are some commercials, and lately the airwaves have been full of commercials of mortgage companies begging customers to call them for refinancing. I recently heard one of these commercials, and it made me sick. It went something like this:
Hi Bob, how’ve you been? The last time I saw you, you were not doing so good; you did know how you were going to make your mortgage payments. Hey, is that a new boat?
It sure is, Stan. I called XYZ mortgage company, and not only did they give me a great loan to refinance my mortgage with and get me out of my debt, but I was able to take more money out to buy this boat!
Wow, Bob, maybe I should call XYZ mortgage company.
And….end scene.
If Bob was having problems making a mortgage payment, why did he buy a boat? Now, I know the response is “because he could”, but that doesn’t make it a wise financial decision that will not have hideous financial ramifications down the road.
If Stan were a close good friend he would have reminded Bob that the real estate market is slowly descending into a black hole. Foreclosures are up, mortgage rates are also going up and inventory is not moving. Pretty soon, Bob will not have as much – or any equity to tap into to buy gas for the boat or perhaps even put a new roof on the house.
I have not identified the company nor have I identified the radio station because there’s more than one company out there with similar message, and more than one radio station playing it. If you’re a homeowner having trouble making mortgage payments, please do not let some half-baked mortgage company convince you that taking money out to purchase a boat – or any other luxury item – is a good idea. Chances are you’ll be regretting it. Remember, the more money you borrow, the more money the mortgage company makes. That’s not necessarily a good thing for you.
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