March 29th, 2016 6:20 AM by Jackie A. Graves
lending transactions often seem complicated, it's not unusual for borrowers to
rely on the expertise of professionals for guidance. But what if the
"professional" you choose is actually a scam artist or predator
looking to push you into a costly or risky situation?
If you don't know the signs of a potential scam, you could become
a victim. It's very important to recognize and avoid pitfalls and traps that
can damage your credit and cause financial hardship by following these tips:
1. Say NO to "easy
money." Beware if
someone claims that your "credit problems won't affect your interest
rate." If an offer is really appealing, get it in writing and then seek a
2. Shop around. Always talk to several lenders to find the
best mortgage loan you qualify for. A mortgage loan product or lending practice
may seem reasonable until compared with a similar mortgage loan product offered
by other lenders.
3. Find out about prepayment
penalties. Know if
the mortgage loan offered to you includes a fee if you pay off your loan early.
If it is a requirement of the mortgage loan, you should ask about other
products that do not contain a penalty for comparison.
4. Make sure documents are
correct. Beware of
anyone offering to falsify your income or other information to qualify you for
a mortgage loan. You are certifying under federal law to the accuracy of your
application information. Never falsify information or sign documents that you
know to be false.
5. Make sure documents are
complete. Do not
sign documents that have incorrect dates or blank fields. Be wary of promises
that a professional will "fix it later" or "fill it in
later" after you've signed.
6. Ask about additional fees. Make sure you understand all of the fees that
are part of your mortgage process. Question any items you didn't request or
know about prior to the time you are asked to sign the mortgage loan documents.
7. Understand the total package. Ask for written estimates that include all
the points and fees. Compare the annual percentage rate (APR), which combines
the fees charged by the lender with the loan's interest rate over the life of
Follow this series just in time for the spring homebuying
season. Plus, look for more tips on MyHome by Freddie Mac.
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