Many people often do not get the mortgage that they need because of lenders who take advantage of aspiring homeowners. Predatory lenders are people who practice mortgage fraud to gain profit from their poor borrowers. They are rampant in the lending market, so it is advisable to be extra careful when looking for a mortgage and when deciding to work closely with lenders. If you are looking for a new home after say, earning a little extra from your business or passive income sources like ETFs trading or stock investment, you need to be careful when choosing a lender to help you find a mortgage for your chosen property. To avoid being taken advantage of by a fraudulent lender, learn these tips on how to recognize these lenders:
Aggressive Advertisements
You will know if a lender or a company is doing fraudulent business if it is aggressive in promoting its mortgage products. Some lenders commonly use extra glossy fliers and brochures to convince you to acquire home loan from them. There are even unscrupulous lenders who have Internet and TV advertisements to entice borrowers to apply for loans. Beware of commercials that use tags such as “Good for a short time” and “Guaranteed low-interest” because they are more likely traps used to encourage borrowers.
In addition, these lenders are sometimes annoying in persuading their prospective clients. They send numerous emails or even call you at your home or office just to pressure you to apply for a mortgage.
Expensive Fees
Another thing that you must watch out for when looking for home loans are the fees that your possible lenders will charge. Applying for a mortgage should not be too expensive. If you think that your lender is giving you a mortgage that is more expensive than other loans in the market, check how much that lender is charging you and look for hidden and unnecessary fees. Study the rates and terms of the mortgage that is offered to you. You must also learn how to analyze the payment structure of your loan to avoid paying for junk fees. Doing so will allow you to pay a mortgage that suits your financial situation and also have extra money saved that you can use to invest in a new small business, pursue your passions, or allocate in trading assets like income-earning commodities, annuities, bonds, or ETF trading.
Changing Terms
If the terms of your loan change just before you close a deal with your lender, do not sign your contract. Your lender must stick with the terms and conditions that both of you agreed. Changing terms can mean that you are working with a dubious lender. Should the lender sees the need to modify any item in your contract, he must inform you about it. Otherwise, you will acquire a mortgage that you cannot repay.
Furthermore, do not always trust lenders who offer you with mortgages that have unrealistically low interest rates.There are some lenders who charge their borrowers affordable interest rates so as not to discourage clients from refinancing or applying for a home loan.The drawback of having too low interest rates is that the borrower will be paying for an amount that is bigger than his loan in the long term.
