Tips to Avoid Loan Fraud


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Very frequently, misguided & misinformed home buyers, often first-time purchasers or seniors, become victims of predatory (false) lending or loan fraud. Below you'll find certain tips which seem to be overlooked by many in order to avoid becoming a victim yourself of this fraudulent proceedings.

1. Take your time and research around. You should be able to compare prices and houses.

2. If a lender or broker tells you they are your only chance to get a loan or owning a home, he is lying. Don't go on to do business with them.

3. Do not sign a sales contract or loan documents that are blank or that contain information which are false.

4. Read through the proposal presented by the lender or broker. And often get a check on it by your legal adviser or mentor.

5. Be certain that the costs and loan terms at closing are what you originally decided upon.

6. Do not be talked into lying about (or choose to lie) your income, expenses, or cash available for down payments in order to get a loan.

7. Look out for higher-risk loans such as balloon loans, interest only payments, and steep pre-payment penalties.

8. Be careful about disclosing things like your need of cash due to medical, unemployment or debt problems. You are very vulnerable in these cases.

9. Don't strip your home's equity by financing again and again when there is no benefit to you.

10. Beware of false appraisals.

11. Do not let anyone convince you to borrow more money than you know you can afford to repay. If you get behind on your payments, you stand a chance of losing your house and all of the money you put into your property.

12. Get several quotes from multiple brokers or lenders so you know you're being charged a fair interest rate based on your credit history, not your race or national origin.

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