Identifying Predatory Lenders

Predatory lending is when lenders in the mortgage industry do things that aren't right. These kinds of lenders take the borrower's home equity and put them at risk of losing their home. But you don't have to get a loan from a lender who takes advantage of people. Everyone should be aware of certain signs that can help them avoid being a victim. Here is a list of them:

1. You might be dealing with a dishonest lender if your monthly payments or loan amount are more than you expected based on the information you were given.
2. You may be dealing with a predatory lender if a lender asks you to refinance over and over again, and each time your monthly payments and total loan amount go up. Look for another lender as soon as you can.
3. If the amount of your loan is more than the value of your home, you should stop and be worried.
5. Make sure you know everything you need to know. Check your loan documents to make sure you have the Good Faith Estimate, the Special Info Booklet, the Truth in Lending, and the HUD-1 Settlement statements.
6. Look at the small print. When your payments are late, you may be dealing with a predatory lender if you have to pay interest every day.
7. Be wary of settlement costs that you were not told about ahead of time or given a reason for.
8. It's a red flag if a lender asks you to leave blank signatures or other lines. Also, look over your documents again to make sure nothing has been changed or added without your knowledge or permission.
9. You may be dealing with a predatory lender if your mortgage loan has a "balloon payment" that requires you to finance the final lump sum with that lender.
10. If a lender tells you to lie on your loan application, stay away from them.

Buying a home could be the most expensive and important thing you ever buy. Choosing the right lender is very important. Your credit score, your hard-earned cash, and your ability to borrow money in the future are all at risk. This is why it is so important to find out if a lender is trying to scam you out of your money and home and get rid of them.