ING: A mortgage without surprises?
I just bought a new home, and unfortunately my evil plains of world domination of the financial markets has net yet been realized, so I had to take out a loan.
I’ve been an ING member for 4 years now. I have a Direct Savings account and an Electric Orange Checking account with them. I even have a ShareBuilder account, though I created that before ING acquired ShareBuilder in 2007. I have to say I LOVE each account I have with them. The customer service is excellent, and web sites are intuitive and easy to use. They pay a good rate on their bank accounts. But I didn’t actively consider them for my mortgage. Why?
I got a mailing recently about the ING 5/1 Orange Mortgage:
“We believe you have the right to a mortgage that fits your needs and isn’t filled with surprises. That’s why we offer the 5/1 Orange Mortgage:
* Low Closing Costs and No Bank Fees
* Options that match most homeowners needs
* Save thousands during the initial fixed rate of 5 years”
Sounds great, and as I said, I love their other offerings. It was that 5/1 part that bugged me. The phrase “initial fixed rate of 5 years” was the clincher. It’s an adjustable rate mortgage that resets after 5 years.
Now, there’s nothing wrong with this. They even point out that the average American only stays in their house for 7 years or less. I’m just not that average this time around. My wife and I lived in our last house for less than 5 years, we knew going in it was a starter home and we weren’t planning on staying around. But this house we would like to stay in until we retire, so the 5/1 adjustable rate was a deal breaker.
Having said that, I must also say that ING is entirely up front about the offer. Many people have said that they got duped into adjustable rate mortgages, not knowing what they meant, and now can no longer afford to make the payments. ING does a good job of stating what they’re offering. I think if I was in the market for an adjustable rate mortgage, I’d probably give them a call.
I’m wondering, does anybody have an experience with an ING Mortgage, or an adjustable rate in general?
Photo by Secretly Ironic
I was sort of duped into an ARM on my house. In reality I didn’t know too much about finances at the time. However, when CountryWide bought my loan, it suddenly became a fixed rate mortgage. I’m honestly not sure how. Maybe the guy who filled out the original mortgage did a fixed rate instead of an ARM. Maybe the transfer process went wacko. Either way, I asked CountryWide about my loan and they assured me it was a fixed rate loan.
Frankly, I’d be nervous to get an ARM unless I knew I was planning on living in the house temporarily. Otherwise, you are just asking for trouble. And frankly, with as low as interest rates are right now, it’s best to try to get a fixed loan anyways as I’m sure the rates will be higher in 5 years.
@ WiseMoneyMatters,
That’s very interesting that your mortgage switched from APR to fixed. I’d say you definitely made out on that deal though!
I think you’re right about interest rates in the next 5 years too. We’re already seeing reports about 30 year fixed rates jumping half a percentage point. 7% or more seems likely given the current trajectory of the economy… but maybe that isn’t a bad thing in the big picture.
ING used to be a good Mortgage Lender but recent experiences with them are leaving very different impression these days. Many Lenders have worked with them in the past to provide their client with competetively priced products but now that ING has chosen to take over the appraisal process, the winds of change have taken hold on the management level there. Don’t even think about using an ING Mortgage for a loan associated with a purchase as it will likely cost you thousands of dollars in delays on the closing due to policies emplemented by those whose idea of sevice are more closely aligned with what you might expect out of a North Korean ruler. If you are considering a refinance through ING directly don’t let them charge you double the going rate for an appraisal you can count on coming in significantly low. Keep in mind that ING is conservative which means that unles you are only 110% sure the value of your current home is at an LTV of below 50% then you might be a prospect for a 75% LTV mortgage with ING if you are prepared to pay the extra cost!