Mortgage Predatory Lending And How To Avoid It

Mortgage Predatory Lending And How To Avoid It



Mortgage Predatory Lending And How to​ Avoid It
There has been a​ lot of​ talk lately about predatory lending in​ the​ mortgage industry,​ but not much talk about what it​ is​ .​
Predatory lending covers a​ lot of​ area and some of​ the​ practices that are used in​ it​ are somewhat difficult to​ understand for the​ average consumer .​
Here are a​ few aspects of​ predatory mortgage lending that might be of​ interest.
The first thing consumers should understand is​ that predatory lending does not begin and end with the​ lenders themselves .​
It is​ true that there are several lenders who are guilty of​ bad loan practices,​ but there are others just as​ guilty .​
These include appraisers,​ mortgage brokers,​ home builders,​ and home improvement contractors to​ name a​ few.
Some of​ the​ things that you​ want to​ watch out for when you​ are considering a​ home purchase include:
Always think twice before working with someone who will sell properties for much more than they are worth by using false appraisals that inflate the​ value of​ the​ home.
Never work with anyone who wants you​ to​ lie about your income,​ expenses,​ or​ job history .​
They may also want you​ to​ lie about the​ amount of​ cash that you​ have on​ hand.
Stay away from lenders who encourage you​ to​ borrow more money than you​ know you​ can repay .​
This is​ one of​ the​ fastest ways to​ foreclosure known.
Some predatory lenders will charge high interest rates to​ home buyers based solely on​ their race or​ national origin .​
The black community is​ especially hard hit with this one.
There are also some lenders and other professionals who will charge high fees that are not normally a​ part of​ the​ home buying process .​
If someone asks you​ to​ pay a​ fee for a​ product or​ a​ service make sure you​ understand what it​ is​ you​ are paying for.
Be very careful when working with anyone who tries to​ pressure you​ into taking a​ home loan that contains high-risk factors .​
These include things such as​ balloon loans,​ interest only payments,​ and steep pre-payment penalties.
The elderly seem especially vulnerable to​ those predators who use high-pressure sales tactics to​ sell home improvement projects or​ work and then finance them at​ very high interest rates .​
Lending predators are good at​ their work .​
If they were not,​ there would not be such a​ problem with them .​
Some of​ the​ cons they use to​ pull people in​ include such things as​ telling a​ home buyer that they,​ and only they,​ are the​ only ones who will finance the​ home .​
They may also try to​ convince you​ that the​ home you​ are looking at​ is​ worth much more than surrounding homes even though there is​ no physical proof that it​ is​ .​
Many of​ these folks want home buyers to​ sign contracts or​ other documents that have blank spaces .​
Home buyers should never sign these types of​ documents.
Another crafty tactic is​ to​ hand over a​ higher than expected bill at​ closing .​
They understand that after all you​ have been through to​ get to​ this final stage you​ are more likely to​ pay the​ added charges .​
Do not pay them unless it​ is​ proven that they are legitimate charges.
The best advice is​ to​ be careful and to​ be wary .​
Take your time and do not allow lenders or​ others to​ pressure you​ or​ to​ push you​ into a​ contract that you​ do not fully understand.




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