Each year uninformed homebuyers, usually first time purchasers or seniors fall victim to predatory lending known as loan fraud. True, there are many lenders, appraisers, brokers and other real estate professional that legit ably want to assist you in obtaining a nice comfortable home with a great loan but always remember that trite phrase “buyer beware.”
Buying or refinancing a home is one of the most important financial decisions that we make, it is vital to learn as much as we can about the home loan process. That is why I decided to list the most important steps you can take so you won't become the next victim of loan fraud.
Step one is to Beware of false appraisals. You should have a good idea of what houses appraise for.
Step two is to take your time and shop around. Competition is great for consumers. If you don't appreciate one lender's offer, there is always another one waiting.
Step three is be certain that the costs and loan terms at closing are what you originally agreed to.
Step four is do not be talked into lying about lie about your income, expenses, or cash available for downpayments in order to get a loan.
Step five is get several quotes from multiple brokers or lenders so you know you're being charged a fair interest rate based on your credit history, not your race or national origin.
Step six is watch out for higher-risk loans such as balloon loans, interest only payments, and steep pre-payment penalties.
Step seven is be careful about disclosing things like your need of cash due to medical, unemployment or debt problems. You are very vulnerable in these cases.
Step eight is do not sign a sales contract or loan documents that are blank or that contain information which is not true.
Step nine is don't strip your home's equity by refinancing again and again when there is no benefit to you.
The Final step is do not let anyone convince you to borrow more money than you know you can afford to repay. If you get behind on your payments, you risk losing your house and all of the money you put into your property.
