06 Jul How To Avoid Disreputable Mortgage Lenders
While the majority of Canadian lenders do their best to protect the consumer, remaining within the confines of state and federal laws, and adhering to real estate law and ethics, an unscrupulous minority of lenders exist who make it their objective to target the uninformed. Knowing reputable lenders from predatory ones can help you avoid getting involved in a scam and potentially losing a lot of money.
Here are some signs that could point to a predatory lender:
The individual has a pre-planned spiel
You can usually tell when someone has simply rehearsed their spiel and is bent on repeating it to every potential customer. Uninterested in your reaction and not asking any questions of you, they keep on talking at you, rather than to you. This isn’t always easy to spot, and some scammers are better at it than others, but if you do spot it, steer well clear!
They pressure you to sign up
It’s important to remember that if you’re refinancing your mortgage, you have three days to change your mind, by law. Immediately locking your loan rate may not be required, so if you’re buying a home and getting a purchase loan, be sure to ask what the penalty will be if you don’t immediately lock the loan rate.
Bad credit? No problem!
Sadly, bad credit is always a problem when it comes to a mortgage loan, and any lender offering you a solution irrespective of your poor credit, will likely not give you an attractive rate and are known as subprime lenders.
White lies on your mortgage application are encouraged
NEVER sign blank documents, no matter what the lender says, and NEVER make false statements on your loan application, it simply isn’t worth it, and mortgage fraud is a serious offense punishable by the FBI. If a lender encourages you to be untruthful on your application, choose another lender.
You’re pressured to accept something you’re not happy with
You don’t have to be a financial expert to know when you’re being asked to pay too much in monthly mortgage payments, and if you don’t feel comfortable with the amount being proposed, and are being pressured to accept it, don’t agree to it and seek advice elsewhere.
They tell you nobody else will ever consider you for a mortgage loan
This probably isn’t true, and a consultation with a reputable mortgage lender will prove it.
When the time comes to sign, your fees are not the same
There may be an honest explanation for the change in fees at the time of signing, but if you’re not happy with what they tell you, or an explanation simply isn’t offered, walk away and if you need to, consult with a lawyer.
Working with a trustworthy mortgage broker in your area is one way of ensuring that you never sign up for a loan with a disreputable lender or scammer.