Avoiding an unscrupulous lender
Before choosing a home mortgage refinance loan,
it’s important to be educated about the
process. Unscrupulous lenders sometimes trick
cash-strapped, borrowers into expensive home equity
loans and mortgages. The risk of choosing a lender
that doesn’t have your best interests in
mind is that you could lose your home if you can’t
afford the payment.
Choosing a reputable lender
Take caution when dealing with unfamiliar lenders
or loan brokers, especially those who have contacted
you out of the blue. Work only with lenders who
have a good reputation in the market. Seek someone
who will agree to put all costs in writing, carefully
explain the loan, encourage detailed questions,
and not rush you into a quick decision. Weigh
all of your alternatives before you decide to
take a home mortgage refinance loan.
Before you sign on the line, think about
your options
Contact several lending institutions before you
sign for a loan. Experts recommend that you get
quotes from a minimum of three lenders. Ask questions
and shop around for mortgage options. Find details
about different types of loans that meet your
financial needs and situation.
Do your homework
Don't focus solely on getting the lowest monthly
payment. Consider other factors such as the duration,
terms of the mortgage, and total cost of loan
fees. Check to see if the interest will be charged
annually or on a monthly basis. Let the lenders
know you've been shopping around. They may be
willing to compete for your business by offering
better rates or terms. Read the loan agreement
carefully for clauses that penalize you for prepayments.
Think twice before you sign
Read the loan documents carefully, especially
the fine print. Sign the loan agreement only after
you understand the terms of loan, fees, and your
obligation to repay. Understanding the terminology
in the fine print will give you the knowledge
you need to ensure you’re making a smart
decision.
Know that you have rights under the law
If you're not comfortable closing the deal alone,
take a lawyer to examine the loan documents before
you sign. Get a copy of the signed loan documents
before you leave the closing and keep them in
a secure place. If you think you've been treated
improperly, try to resolve the problem with the
lender. If that doesn't work, consider asking
for help from the appropriate consumer rights
agency.
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