Scammers are everywhere and that also extends to the mortgage industry. With so many people looking for mortgages, scammers know there’s a target-rich environment. Even well-intentioned brokers can leave their clients in over their heads if they don’t take the time to make sure they are getting a fair deal on any given mortgage. In this blog post, we’re going to look at some of the key warning signs when choosing a mortgage. Follow these tips to avoid getting scammed and find the right mortgage for you.
Table Of Contents
Be wary of any mortgage broker who promises you the world.
When it comes to mortgages, there are many factors that determine your monthly payment, such as the down payment, length of the loan, interest rate, and so on. So it’s impossible to promise you a specific monthly payment based on a single factor. If someone is promising you a specific monthly payment, they’re giving you false information or they’re scamming you. You should also be wary of any broker who asks for a large upfront fee. In some cases, a broker who is willing to take a large upfront fee is just trying to get as much money out of you as possible before they disappear with your money.
Be diligent about reading the fine print.
You’re probably aware that you should read the fine print when you sign contracts for anything. Mortgages are no different. When you sign the papers for a mortgage, you’re agreeing to pay back a specific amount. Depending on the terms of your mortgage, you may have a 30-year loan, which has a lower monthly payment than a 15-year loan. The catch is that the total amount you have to pay back is higher. If you don’t read the fine print, you may not realize that you’ve agreed to pay more than you should have to. In addition to reading the fine print for the total amount, you should also read it for the monthly payment. If you are getting a fixed-rate mortgage, then the monthly payment should stay the same for the life of the loan. However, if you are getting an adjustable-rate mortgage, the monthly payment can change over time.
Don’t sign up for a mortgage that has an adjustable rate without understanding how it works.
Adjustable-rate mortgages are loans that start with a fixed interest rate for a certain period of time. After that period ends, the interest rate is expected to change with the market. This is something you should know before you sign up for an adjustable-rate mortgage. If you’re not informed about what happens when the rates adjust, you could end up paying more than you expected. In some cases, people have ended up with monthly payments that are several times what they were before. If you don’t understand how the rate will change, you may be signing up for something that is way too expensive.
Watch out for fees that sound too good to be true.
If a mortgage broker tells you that you can get a loan at a very low rate with no down payment, he’s probably scamming you. However, this is something that scammers will try. To get a mortgage, you do have to pay a down payment. There are mortgages for people who don’t have the cash for a down payment, but those are going to be more expensive. Additionally, if the broker tells you that you don’t need to get good credit to qualify for a loan, that’s another red flag. While you can get a mortgage without good credit, it will be more expensive and harder to get.
When researching your mortgage options, make sure you know what you’re comparing.
If you have multiple lenders come to you with different quotes, you need to go through each one carefully to make sure that you know what you’re comparing. You don’t want to end up taking the first deal that comes along. Before you sign anything, you should have a clear picture of what the loan is going to cost you. Make sure that you have your quotes in writing, and don’t sign anything until you feel comfortable with the deal.
Be wary if the broker only wants to talk by phone or email.
If a broker is only willing to talk over the phone or through email, it’s probably a scam. Most legitimate mortgage brokers will want to meet in person. This doesn’t mean that you should rule out every broker who doesn’t want to meet with you in person. However, you should be wary of any broker who only wants to do everything by phone or email.
Your instinct should also be telling you something is off.
If everything about the process seems too easy, there’s a good chance you’re dealing with a scam artist. You shouldn’t have to divulge tons of personal information just to get a quote. A legitimate broker will ask you to fill out some paperwork, but they should not be asking you to give them your social security number or other sensitive information.
Bottom line
Mortgages are complicated, and it’s easy to get confused. If you are confused, you are more likely to fall for a scam. The best thing you can do is to slow down. Choose a reputable broker and someone you trust. Make sure you do your research and read all the fine print before signing any contracts. You should also make sure you are comparing apples to apples when you are looking at rates. If you follow these tips, you’ll be more likely to avoid being scammed and find the right mortgage for you.
If you found this article helpful, please subscribe to my newsletter by filling out the form below so you don’t miss out on any future posts. Also, if you have any article ideas in mind, feel free to leave a comment on a topic you would like covered in an upcoming post.
