In parts one and two of this multi-part blog series, we’ve gone over a number of signs that you might be dealing with a deceptive or predatory mortgage lender. While most in this industry are straightforward and reputable, there are also unscrupulous individuals or companies who try to take advantage of mortgage borrowers, especially first-timers who have not been in the market before.
At Altius Mortgage and our partners at Mortgage Ogden, we’re here to ensure this never happens to you. On top of offering numerous mortgage loans and services, including those tailored to first-time homebuyers, we also provide assistance with a wide range of tips and areas of expertise – including how to avoid scammers and other dishonest folks in this industry, especially as you’re shopping around to find the ideal lender. Today’s final entry into our series will go over a few other signs to watch out for.
We’ve touched on this area already in terms of lenders who will show you a monthly interest rate while trying to make it seem like a yearly one; sadly, deceptive presentation is a common tactic among predatory lenders. There are several ways this might happen, from graphs that are drawn with misleading data bars to information you’re sent in paper form that doesn’t quite match what the lender told you during your conversation.
If you’re unsure about any piece of data or paperwork, you should ask. If the answer you’re getting from the lender only confuses you further, or does not actually present you a solution, this could be a red flag that you’re being duped.
Bank Account Access
There are basically no situations where a lender should need access to your bank account for direct withdrawals. One who asks for this, or for a backdated check, is often preparing to pull money out of your account that’s not even related to the mortgage. Ensure you protect yourself from this harmful tactic by only working with reputable lenders who have a history in your area.
Finally, one of the toughest tactics to spot from predatory lenders, but also one of the most common, is the way they manipulate loan terms. A “predatory” loan is really designed to keep the borrower in a debt cycle, one where their interest rate is so high that they’re only ever paying down interest – their principal balance stays the same for years at a time while interest just keeps building up. These lenders will target people who don’t have the financial means to recover from this sort of thing.
However, you can avoid this tactic by simply being diligent. Read every bit of paperwork carefully, and work with independent financial advisors to confirm you’re not putting yourself in a bad position.
For more on common signs of a predatory lender, or to learn about any of our mortgage rates or mortgage loan services, speak to the staff at Altius Mortgage today.