Scams And New Mortgage Programs

by | Oct 16, 2017 | Loans & Finance

In any type of financial business deals, knowing the lender is a critical part of being a wise consumer. This is true when doing business in-person with a mortgage company or when working online.

Always take the time to verify the mortgage service and to find out how long they have been in business. This is often much easier when working with online companies as their records, customer feedback and even reviews of the service on independent sites are easy to locate and read.

Unfortunately, there are always some people that create new mortgage programs that are scams. With due diligence and checking up on the company, home buyers can protect themselves from these issues. Additionally, by shopping at the reputable and established mortgage services, home buyers will get a good idea of the competitive rates in the market. When rates offered are significantly lower than the reputable companies, it is very likely a scam.

Watch for Fees and Penalties

There are guidelines and rules for writing any new mortgage programs offered to consumers. Often scammers will include specific clauses in the mortgage that violate these regulations. A good example of this is charging a prepayment penalty, which will be illegal to charge for the vast majority of mortgages.

Additionally, some of the fraudulent types of charges offered on mortgages can be extremely high closing costs. Reputable lenders will typically charge between 2 to 5% of the loan for these costs. Higher closing costs are often a way for a less than scrupulous lender to recoup some of the costs of offering a lower interest rate in a hidden type of additional cost.

There are great rates and top lenders offering new mortgage programs that are ideal for borrowers. Staying with the reputable, established lenders is always the best decision. Don’t forget that online lenders typically offer slightly lower rates, which makes them a great place to start looking.

As an established, reputable and highly competitive online mortgage service, Guaranteed Rate offers low rates and exceptional customer service for new mortgage programs.

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