Warning Signs of Predatory Bad Credit Home Loan Lender
Even though you are looking for a subprime mortgage lender you
still have many options. After comparing the loan offers from the different
lenders, negotiate the terms. Do not feel that a lender is doing you a favor by
offering you a subprime mortgage. Many times the compensation a lender receives
for a subprime mortgage is greater than that which is received for a
conventional mortgage.
Most subprime mortgage lenders are honest and responsible
business people. Still, the regulation of subprime loans varies widely and you
should be careful not to fall victim to a predatory lender.
1. Don’t respond to telephone or direct mail offers from
subprime mortgage lenders. Do your own research. The Better Business Bureau, the
telephone book and the Internet are all good resources. Ask friends for
referrals.
2. Don’t allow yourself to be pressured. Ask for offers in
writing and use plenty of time to compare them.
3. Don’t sign any documents that have blank spaces or
incorrect dates.
4. Don’t be convinced to inflate your income or net worth.
5. Don’t skip reading any portion of your loan documents
because your lender tells you “that part isn’t important”.
Choosing a subprime mortgage lender is like any other
purchase. The more knowledge you have and the more research and analysis you do,
the better your decision will be.
What are the warning signs of a predatory bad credit home loan
lender?
There are a number of things that should raise red flags and
warn you that you are dealing with a predatory home loan lender:
Ø Suggests that you falsify income or other information on the
loan application. For example, beware a lender who tells you to say that your
income is higher than it really is.
Ø Pressures you into applying for a bad credit home mortgage
loan or suggests that you apply for more money than you need to buy the home.
Ø Pressures you into accepting monthly payments you cannot
afford.
Ø Fails to provide the required loan disclosures or tells you
not to read the fine print on the loan application.
Ø Misrepresents the kind of credit you're getting, such as
calling a one-time loan a line of credit.
Ø Promises one set of terms when you apply for the loan, then
gives you another set of terms to sign - with no reasonable explanation for the
change of terms.
Ø Tells you to sign blank forms - and says they'll fill in the
blanks later.
Ø Refuses to provide you with copies of the documents that
you've signed for your bad credit home mortgage loan.
Ø Entice you with an unreasonably low introductory interest
rate. These low teaser rates usually come bundled into mortgage loans who
ultimate interest rates are very high.
How Can I Make Sure I get the Right Bad Credit Home Loan
Lender for My Needs?
Always use common sense and follow your intuition. Also, if
one lender offers an unbelievable offer, check with another lender to see what
bad credit home mortgage loan they can offer you. If they can't offer a similar
product, then it probably doesn't exist! Always remember that if it seems too
good to be true, it probably is.
Always do your homework when shopping for any mortgage loan.
If you are unsure about the reputation of the lender, check with the Better
Business Bureau and get references from previous clients. Failing to do your
homework and research up front could mean that you put your home at risk
unnecessarily
By
Keith Davies &
Carrie Reeder
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