Last night, in the middle of ads for opioid-induced constipation and prescription drugs to relieve diarrhea, Quicken Loans dropped an ad bomb that magically transported viewers — however briefly — back to the mortgage-fueled glory days of 2004, when every part-time wedding photographer owned three houses and had credit cards with six-figure spending limits.
“What if we did for mortgages what the Internet did for buying music, plane tickets, and shoes?” asks the ad for Quicken’s recently launched (pun intended) Rocket Mortgage product.
“You could get a mortgage — on your phone,” continues the ad. “And if it could be that easy, wouldn’t more people buy homes? And wouldn’t those buyers need to fill their homes with lamps, and blenders, and sectional couches with hand-lathed wooden legs?”
It then goes on to imply that doing so will benefit the whole country that it may, in fact, be your patriotic duty to help America by getting a mortgage.
While people have fired off countless critical arrows at the ad, we wanted to focus on two particular problems with the message.
1. Confusing Mortgage Application With Actually Getting A Mortgage
You don’t actually “get a mortgage” over your phone with Rocket. You’re just applying for one. Even if you’re approved, you’re still not really “getting” anything yet.
Receiving a mortgage is a drawn-out process requiring reams of supporting documents — tax filings, income statements, letters explaining why you’re relocating, how you won’t likely get fired from your job in the next few years, and why your parents gave you a $8,000 “gift” — and it’s only gotten more burdensome in the years since the crash of the housing bubble because pre-bubble lenders over-greased the wheels of the underwriting process.
A mortgage is not a CD, a plane ticket, or a pair of shoes. It is often a multi-decade financial obligation that both the lender and the borrower need to take seriously.
2. Equating Homeownership With The Ability To Buy Stuff
Like many city-dwellers, I spent most of my adult life renting. And yet — contrary to the implications of the Rocket Mortgage ad — I’ve been able to purchase lamps, blenders, and even sectional couches. Perhaps if I’d gotten a mortgage earlier in my life, I’d own some sweet hand-lathed legs?
Having a home loan does not magically open up a homeowner to the world of free money. If anything, it may make it more costly, at least in the short run, to acquire the necessities. New homeowners are often cash-poor because of the burden of having to pay anywhere from 3-20% down, plus closing costs, moving and storage fees, maybe an attorney, and all the money that the cable company says you owe because it insists you never returned your modem — and pray to whatever you believe in that your hot water heater doesn’t blow a gasket two days after you move in.
To pay for this stuff, homeowners may need to pull out their credit cards or borrow more money — or live sans new lamps, sectionals, blenders, until their coffers are restocked with cash.
You’ve got years, possibly decades — perhaps even the rest of your life — to make your new house a home. Be smart and take it slow that you can actually enjoy that time instead of worrying about accruing interest on the debt you’ve piled up buying lamps and blenders.