MORTGAGE PRECAUTION TIPS
The first thing many homebuyers do prior to touring homes is to get a mortgage loan approval. It is recommended, that the home buyer interview multiple lenders to determine what loan programs lenders have to offer, and try to determine if there will be a cooperative working relationship.
During the loan approval process the buyers’ should understand that lenders should approve you based on your income, credit score, and your ability to make the monthly mortgage payments. If the lender is using other criteria to justify your loan approval, this is a red flag.
If the latter is true, then slow down the process, and/or consider not working the lender. In addition, if any of the following events occur with a mortgage lender, stop working with this lender:
• Request you falsify information on your loan application. Falsifying information on your application means you could be fined and/or serves jail time. If that did not happen, you may be required to pay off loan immediately, or force into the street to live.
• Pressures you to borrow more money than required for the purchase of the property. If this occurs the lender is trying to earn a greater commission. If you try to reinvest this extra money, you may earn less interest than you are paying.
• Pressure to accept greater monthly payment than you can afford. Remember there is more to life than living between four walls, and this will probably cause serious financial troubles.
• Lender does not inform you the Annual Percentage Rate (APR) and/or does not provide you an itemized list of closing cost within three days from application for loan. These disclosures should be provided to you in the form of a written document.
• Lender promises you one set of terms, and then delivers a different set of terms at closing. Buyer needs to step back, review the situation with a lawyer, and if possible take your business elsewhere.
• Lender requests you to sign a blank form. This is never okay. If this was to happen, you may be forced to accept terms you did not approve.
• Lender refuses or unwilling to give you copies of forms or documents you have signed. If this would occur at closing, do everything possible to kill the deal. Recommend contacting a lawyer immediately.
If you feel or know that you were scammed, report it to The CA office of Attorney General
The good news is the majority of Lenders are honest and trustworthy.