If you’re new to the real estate game, you are a prime target for a predatory lender. Educate yourself and do not fall prey to their games.
The majority of lenders you will come across are legitimate companies who comply with state and federal lending laws. There are a few that do not play by the rules, and they have found success in preying on the uninformed.
Are you the type of person who would buy a “Rolex” from the guy on the street corner who flashed you a glance from inside his trench coat? Probably not, but many people like you still fall for the games of an unethical mortgage lender. Let’s make sure you aren’t one of those people.
Here are a few things to look out for:
- The representative seems like a snake-oil salesman. If you are getting the “willies,” don’t engage. Listen to your intuition.
- The interest rates and fees do not coincide with the market. It could be a scam. Investigate the current prime interest rate before speaking to any mortgage company representative. You should also do some research on your own numbers—credit rating and FICO score.
- You are pressured into taking a loan that is difficult to understand. A legitimate lender will make certain you understand each and every clause in the mortgage contract. If a representative doesn’t take the time to explain it; don’t sign it.
- Numbers are different at the closing table than on your Good Faith Estimate. Make sure you bring your estimate and compare the rates, charges and fees. Ask questions until you are satisfied with the answers. If you are still not sure, walk away from the table and consult a lawyer. Do Not Sign Anything!
Read up and Arm Yourself. Avoid them from the onset. Don’t respond to direct mail or aggressive telemarketers. Education is the best defense.