I agree totally, it's misconceiveing and buyers usually don't know that is happening. Another thing that gets me is when buyers look online for rates......I always tell them, go ahead! Then tell them...you might find it somewhat confusing because you will see different rates most likely at different websites, only on a specific program that you have to qualify for! Ofcourse they never list the qualifications for the product or the sales person would miss out on the call.
Recently I had a buyer who told me he wanted his payments in the 800-900 range on 152K with little downpayment. He got that at one of the websites as a quote off of lending tree. However they did not include his taxes and insurance, or MIP on an FHA loan which amounted to 250$, and absolutely has to be included. So I had to explain that. To me it's essentially bait and swich to a certain degree.
Thank you so much for the reminderl. Since I am not a mortgage broker, I always refer my clients to a mortgage broker for all mortgage related information. However, they will sometimes ask us questions during our encounters and it is always nice to have some of the basic knowledge handy.
I agree that it is misleading and I always do remind my clients that they have to compare the true cost of the mortgages and determine which way to go depending on their needs and wants.