How you can avoid home mortgage refinancing scams?
If you are looking to learn how you can avoid home mortgage refinancing Scams, Well most lenders are honest but, as with any industry, there are a few unethical people out there willing to cheat you out of your money. Scam artists particularly like to con people who have fallen behind on their mortgage and are in debt.
To prevent this from happening to you, pay attention to the following warning signs or “red flags.”
Red Flag #1: Door-to-door/telephone solicitation. When someone comes to your door or calls you out of the blue and tries to talk you into borrowing money through refinancing, it is likely you are in the presence of a scam artist. No ethical and successful lender is going to go door-to-door to generate business! They do not need to!
Red Flag # 2: The lender pushes mortgage loan payments that are too high for your income. Scam artists will make everything sound great while obscuring how much money you will have to pay on a monthly basis. This can put you at the risk of foreclosure if you are unable to meet those monthly mortgage payments. Never sign any document without knowing exactly how much you are expected to pay each month.
Red Flag #3: High interest rates, high broker’s fees and other high settlement costs. Scam artists are experts at hiding information on points, fees, and other costs. These items can end up costing you thousands of dollars you do not need to pay. The best defense here is to do some comparison shopping among other lenders to you can get a realistic idea of going charges. Also, if you do not understand any items or the “lender” refuses to explain them, do not sign anything and look elsewhere!
Red Flag #4: A “lender” insists on refinancing lower interest loans. When a lender insists on refinancing lower-interest loans/liens on your property into one bigger and higher-cost mortgage, run the other way! You are in the presence of a predator. It makes no financial sense to trade lower-cost loans/liens for higher-cost ones. You will end up in more debt and run the risk of foreclosure.
Red Flag #5: The “lender” puts false information on the loan application or encourages you to do so. Again, run the other way! This is illegal! Typically, in this scam, the “lender” makes your income appear higher than it really is. Or, he/she asks you to come up with false documentation to suggest that your income is greater than it actually is. Never do this! Again, this is illegal, and you will end up with a home you cannot afford.
If you have any more questions about Refinancing, Purchasing, or selling in California be sure to contact me at 909-920-3500
Teresa Tims is President of TDR Mortgage in Charming Downtown Upland CA. She prides herself in offering quality home loan products, competitive pricing and knowledgeable assistance when helping her clients select a home loan. Teresa is a life-long resident of the Inland Empire.