Predatory lending is an unfortunate reality. There are some simple steps you must take to prevent falling victim to one of these con-artists when buying your new home in California.
Lenders who offer deals that are ‘too good to be true’ or incredibly low interest rates ‘for a limited time/limited number of customers’ are often predatory lenders. Many times, home buyers are pressured to sign forms that are not completely filled in or are even totally blank. Sometimes they are even coerced into agreeing to mortgages with payments they cannot afford. Often these predators target the elderly, minorities, and especially those buyers with a limited knowledge of English.
Remember, no reputable lender will refuse to answer questions, clarify words or sections of the paperwork which are unclear, or object to having a third party review the loan paperwork before you sign. Any lender who refuses to do these things, or pressures you to sign the forms right away, is suspect and should be researched with the California Department of Real Estate. Make sure that the terms of the loan are listed in writing on the paperwork. Never rely on verbal agreements. Also, ask the lender for a Mortgage Loan Disclosure Statement, sometimes called a Good Faith Estimate. These tell you the full cost of the loan over time.
Thoroughly checking the lender out takes only a few moments of your time, but it can save you from making a costly and heartbreaking mistake in the end.
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