A predator is defined as one that
preys on others, which is why some lenders have fittingly earned the title as
predatory mortgage lenders. Excessively
high interest rates, questionable and/or hidden fees and high pressure tactics
used to direct borrowers to a larger loan than they may be able to afford are
trademark characteristics of a predatory mortgage lender.
Prey Verses Predator
When it comes to obtaining a
mortgage, the rules of the jungle often apply.
If you aren't careful, you may find yourself in the grasp of a
questionable foe. If you are someone
who has had past credit problems or simply find yourself struggling to obtain a
mortgage, it may seem like a good idea to sign on with any lender who can close
the deal.
But wait, jungle etiquette
suggests that you should be knowledgeable of your surroundings and always look
before you leap. Before making a quick
decision on a loan that nobody else would approve, ask yourself whether or not
the deal is a good one for you.
Measuring Up
If you suspect that you have been
subjected to a predatory mortgage lender, look at how they measure up to other
lenders. Were you charged fees up front
and, if so, how much were they and what were they for? Do the lender's interest rates compare to
current market rates or do they exceed them?
When reading the fine print, do you notice fees that were never
mentioned before but have now suddenly appeared in the paperwork? An honest lender has nothing to hide and
will not surprise you with unexpected costs.
Who's At Risk
To put it simply, anyone is at
risk for dealing with a predatory mortgage lender. This likelihood increases, however, if the home buyer lacks the
proper knowledge in how to identify an unscrupulous lender who preys on the
misfortune of others.
Individuals who are especially
vulnerable include those that have been turned down by other lenders and have
little or no hope of obtaining a conventional loan. This may include individuals with severe past credit problems,
accounts in collections, first-time home buyers with little or no credit history
and the elderly who have difficulty understanding the loan process or reading
the fine print.
When it comes to obtaining a home
loan, the process can be both exciting and confusing. There is a lot of paperwork to be signed, details to be worked
out and numbers to be crunched. Your
REALTOR® can help to steer you toward a lender that will help you to get the
best value for your dollar.
Comments
Post a Comment