To many people, owning a home is a dream. However, if purchasing a home involves borrowing from a predatory lender, that dream can quickly become a nightmare. This article offers tips on spotting and avoiding predatory mortgage lenders.
Lender Charges Excessive Prepayment Penalties
Reputable lenders will rarely charge prepayment penalties, and, if they do, the charges are reasonable. Predatory mortgage lenders charge excessive prepayment penalties in order to discourage your from refinancing.
Mortgage Contract Contains a Mandatory Arbitration Clause
If you sign a mandatory arbitration clause, you forfeit all of you rights to take legal action of your lender. This means, if you later discover that you’ve entered into a mortgage with a predatory lender, you will not be able to take legal action to get out of the loan.
Your Interest Rates Are Higher Than Expected
Many predatory lenders will place borrowers into sub-prime mortgages even when they could qualify for a regular mortgage through another lender. Sub-prime mortgages have higher interest rates and considerably poorer terms than regular mortgages. Take a moment to consider some reliable mortgage providers, and find out more about home loan interest rates at www.abcloanguide.com
To avoid predatory lenders, borrowers should check their mortgage company’s name with the Better Business Bureau and Consumer Reports. Additionally, borrowers should always compare rates among mortgage companies before signing any loan contract. If you are hesitant about signing a contract, hire a lawyer to go over it with you. Lawyer charges will be significantly cheaper than entering into a nightmare mortgage.
View our recommended providers for Home Mortgage Financing. Also, make sure to look at ABC Loan Guide's list for New Home Financing.
