Both your home purchase as well as the mortgage on your property are recorded in public record after you purchase. Therefore, after you purchase you’re highly likely to receive some solicitations by mail. It’s also common for these solicitations to show the name of your lender on the envelope or letter or both, as a way to make you think the communication is from your lender. The name of your lender is a part of the public record. You’ll want to read the entirety of the letter including the fine print to check whether the letter is actually from us, or just written in a deceptive way to make it appear like it’s from us.
We (First Home) do not offer any services other than mortgages, and so if you’re being solicited for addon services, it’s not from us, nor is it affiliated to us. Four common examples of some ads you’ll receive, which might be disguised and seem like communication from us, are:
a. Offers to sell you a copy of your deed or an original of your deed. This is not something you need to purchase from a third party, deeds are public record. Don’t pay for this!
b. Offers to sell you a biweekly payment plan for a fee. This is not something you need to purchase from a third party. Biweekly payment plans may be possible to enroll into depending on who your servicer is. Biweekly plans offer a chance to make 26 half-payments per year, so effectively you are making 13 payments. You can accomplish this same goal by simply making one extra payment a year or by adding more to your monthly payment, for free. Meaning you don’t need a biweekly payment plan to have the same impact as a biweekly payment plan.
c. Mortgage protection plans / mortgage insurance. Mortgage protection plans are a different type of mortgage insurance which acts somewhat like life insurance. If you were to pass away, the mortgage protection plan/mortgage insurance would pay off your mortgage loan. However, a mortgage protection plan/mortgage insurance plan is in my opinion inferior to a life insurance policy because as you pay your loan amount down, the amount of coverage that a mortgage protection plan/mortgage insurance plan decreases. Life insurance coverage would not decrease as you pay your mortgage down. In my opinion you wouldn’t want your coverage to decrease, so it’s not as good as choosing regular life insurance. And, I don’t recommend buying insurance from a company who solicits in deceptive ways.
d. Home Warranty Renewal. You might receive a solicitation informing you that your home warranty is expiring. If you don’t remember purchasing a home warranty, it’s highly likely you do not have one. And so their informing you your home warranty is expiring is misleading. I receive these solicitations often for both my house and car. If you do want to buy a home warranty, I recommend purchasing one from a company that doesn’t solicit business in deceptive ways.
IMPORTANT NOTICE! URGENT! EXPIRING! (If you see this language it’s perhaps a solicitation)
If you ever receive these solicitations and you are unsure if they are legitimate, please reach out to me! I actually received a call yesterday from someone who sells mortgage protection plans and he asked me to refer clients to him. He usually gets his business from buying leads from companies who search public record for names and addresses, and then he sends letters. But, I don’t think a mortgage protection plan is a good product, and I also would not recommend doing business with a company who solicits business by making their letters appear like they are from us (when they are not).
You will receive legitimate communication about your mortgage by mail, and this’ll include the following:
- Letters with instructions on making mortgage payments and / or signing up for your online account. If you receive these letters and are unsure if they are legitimate, please scan or photograph it to me by email and I’ll help confirm!
- Escrow analyses. Once a year you’ll receive letters informing you how your mortgage payment will change based on changing property taxes / home insurance. If you have an escrow account, do keep in mind that you’ll receive tax and insurance bills when they’re issued, but escrow pays this on your behalf. Learn more https://alexjaffe.com/what-is-escrow
- Letters asking for you to document your current insurance. If you change insurers or policies, or if your insurer doesn’t automatically send the proof of coverage and invoice annually, you may receive a letter asking you to document your insurance coverage.
In the future, I’m also happy to discuss with you whether a refinance makes sense, either because your financial situation changes or when interest rates drop. As always I appreciate your business and would love to help any friends or family you think could use my advice!