Pamela McArdle's Blog
Mortgage scams are everywhere, and many times are well disguised so they can be hard to uncover. Not all mortgage lenders have your interest at heart so when you go out for a mortgage loan, keep an eye on these warning signs and Mortgage scams are everywhere, but this time around they come like a wolf in sheep clothing, so it is pretty hard to uncover them. Not all mortgage lenders have your interest at heart so when you go out for a mortgage loan, keep an eye on these warning signs and be prepared to run away from any lender who does the following shady actions:
They pressure you to borrow more than what you want or need
Even though you are eligible for a certain sum of money that does not mean you have to spend heavily on buying a home. Paying less on a home purchase will prevent you from living from hand to mouth in your new home. An honest lender understands and will respect your choice to borrow less than you can afford instead that encouraging you to overspend or splurge on a house.
They rush you into signing documents without reading it
Getting a mortgage is complicated. There are piles of complicated paperwork, so it is crucial that you wrap your head around every document before putting your pen on it. If a lender encourages you or uses the familiar phrase "Everything is fine," it is best you withdraw yourself f from the mortgage. No matter how busy the bank may be, they would give you time to read through the papers.
They don’t give you a Good Faith Estimate
According to law, after three days of applying for a mortgage, a bank must provide a Good Faith Estimate showing your mortgage rate, closing cost, and other mortgage-related expenses. This way, a borrower will clearly understand their cost and know the estimated amount you will pay at closing. A shady lender typically does not provide this, so make sure you request one. Many banks hide this information to prevent borrowers from comparing the cost with other banks.
They use the bait and switch on you
To get more borrowers and get them excited about taking a mortgage, disreputable lenders promise borrowers one set of terms, but when it gets to closing, they deliver a different set of conditions. It is the sad truth some lenders get borrowers excited and take advantage of them when they're in a state of euphoria to alter the loan terms at the dying minute. If a lender uses this tactic on you, request an explanation. And if their reasons do not seem reasonable to you or your realtor, do not sign the mortgage documents.
They give you a blank loan form to sign
When going over mortgage document with your loan officer, be watchful for any blank forms or lines, and make sure the lender fills in all relevant information before you sign.
Getting a mortgage is not a stroll in the park. Experts recommend that you consult your attorney, local credit counseling agency or financial advisor to be on a safe side.