A holiday marketing pitch had one homeowner nearing the end of their mortgage fuming over what they deemed a "predatory" practice.
Here's what to know
In Reddit's r/mildlyinfuriating, the homeowner said they are just two years away from paying off their mortgage. So they were surprised to receive an advertisement in the mail from their lender encouraging them to refinance their house in anticipation of holiday spending.
"Holiday planning shouldn't bring financial stress. Unlocking your home equity through a refinance can give you the flexibility to consolidate high-interest debt or cover upcoming seasonal expenses," the ad read. It featured a photo of a couple decorating a Christmas tree.
Commenters shared similar sentiments over rampant advertising.
"That's wild. PSA: Never use your home's equity for consumer debt," one advised.
"I lost respect for my community credit union years ago when they started pushing VACATION LOANS all over their branch and in mailers," another remarked.
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More background
While several commenters noted that lenders make money by, well, lending, the original poster and others took issue with how they encourage customers to borrow for nonessential luxuries, putting them at risk of foreclosure if they can't pay the debt.
"I only use home equity loans for major home projects, like (so far) repairing the roof and redoing my driveway. Things that actually improve the value of the home," one said.
Rough estimates by Siteefy show that the average consumer may see up to 10,000 ads daily (browsing and shopping habits influence the total number per person). This can push people to spend money on things they don't need, also contributing to excess waste and pollution.
In this case, the homeowner's answer was a refusal to answer. They'd keep making mortgage payments rather than accept the holiday offer.
"I get it, financial companies need to loan money to make money, but this just seemed to be trying to take advantage of people," the OP concluded.
Where can I learn more?
These stories cover mortgage payoff decisions, downsizing, equity release, and the risks of rising mortgage payments.
• A 73-year-old with $200,000 in savings faced questions about paying off a mortgage versus keeping cash.
• A U.K. family owing £165,000 considered downsizing to go mortgage-free before their rates reset.
• A U.K. mother nearing 60 considered equity release, prompting warnings about depleting her home equity.
• U.S. homebuyers turned to riskier mortgage products as higher interest rates drove applications down.
• In the U.S., 150,000 adjustable-rate mortgage borrowers could face rates doubling and payments jumping $1,080.
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