When you are looking for a lender for a mortgage or other loan be careful to evaluate each lender and what they have to offer. Do not become a victim of loan fraud.
1. Shop around for a loan and see what various lenders have to offer. By shopping around you can make sure you find the best interest rates available to you.
2. Never accept a loan from a lender that tells you that no other bank or lending institution will extend you credit or grant you a loan. If they tell you this, they are most likely trying to trick you into accepting a loan from them so that they can charge you higher rates.
3. Do not be talked into taking a loan for more money than you can afford. If you are unable to keep up with your payments, you can lose your home and harm your credit. You know how much you can afford.
5. Never let the lender know of any special circumstances as to why you may be very desperate for a loan. If you do this, they may take advantage of you.
6. When applying for a loan always be honest about your employment, your income and any assets. Remember that lenders make money off of you if they lend you money. Therefore some unethical lenders may encourage you to stretch the truth on applications to be sure you will be approved for a loan.
7. Always know what you are signing by carefully reading over any contracts. Do not allow anyone else to “paraphrase” what the contract says. Never sign a contract with any false information. And, of course, never sign an incomplete contract. For example, do not allow anyone to say, “we will fill this information in later, you just need to sign here.”
8. Also when you are closing on a loan, carefully review all details. Make sure that you are in fact being charged the interest rate that you were told. Be certain that all other aspects of the contract are just as you agreed to.
9. Be leery of certain types of loans such as interest only payments and balloon loans. They can end up costing you much more money than you need to pay.
10. Make sure that any appraisals you receive in relation to your loan are accurate. For example, if the home you are going to buy is appraised, make sure the amount is not unreasonably high or low.