Every year, misinformed homebuyers, often first-time purchasers or seniors,
become victims of predatory lending or loan fraud. Below you'll find the top ten
ways to avoid becoming a victim yourself.
1. Take your time and shop around. You should be able to compare prices and
houses. If a lender or broker tells you they are your only chance to get a loan
or owning a home, don't do business with them.
2. Do not sign a sales contract or loan documents that are blank or that
contain information which is not true.
3. Be certain that the costs and loan terms at closing are what you
originally agreed to.
4. Do not be talked into lying about lie about your income, expenses, or cash
available for downpayments in order to get a loan.
5. Watch out for higher-risk loans such as balloon loans, interest only
payments, and steep pre-payment penalties.
6. Be careful about disclosing things like your need of cash due to medical,
unemployment or debt problems. You are very vulnerable in these cases.
7. Don't strip your home's equity by refinancing again and again when there
is no benefit to you.
8. Beware of false appraisals.
9. 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.
10. 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.
