How to Spot a Bad Home Loan Deal
The best way to find a good home loan deal is to be aware of what a bad one looks like. A home loan is not considered a light responsibility. Getting yourself into a bad home loan deal can result in financial disaster. When you apply for a home loan, make sure that you make wise and sensible decisions.
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Before jumping into a random home loan offer, make sure that you are not dealing with a fraud!
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Common Signs of a Bad Home Loan Deal
- A deal that’s beyond your financial comfort zone – Wise homeowners will usually already have an ideal home loan deal that they can afford. This deal should not only fit the budget, but it should also be safe enough for when finances get tight unexpectedly.
Sadly, some lenders will pressure clients into getting more than they can actually afford, tempting clients to push their budget slightly to get a better-looking house, bigger property, etc.
A good lender will consider your monthly income and other expenses and will help you get the best deal with what you have.
- Absence of Good Faith Estimate – Lenders are required to show you the overall home loan cost estimate. This estimate will inform you of all the fees, the interest rate, APR, insurance cost, etc. This is for you to be aware of where your money is going and to make sure that they don’t have hidden charges. If your lender does not provide you with one, then something shady is going on.
- False Advertisement – We usually consider a lender based on the offers that we see or hear, either from the internet or just from the community. Unfortunately, some of these offers are just bait for us to choose that lender. When you apply for a home loan, they wind up giving you another deal with a much less enticing offer.
- Questionable Signature Culture –Your signature is very important. If you sign a document, that means you agree to all the terms and conditions stated in it. Do not just sign anything without being mindful of what the document states. Most importantly, do not sign an empty form or document. The lender can put anything they want on the empty form and hold you accountable for it.
Some lenders practice this kind of trick.If your lender asks you to just fully trust them and not read the contents of a document or sign an empty form for them, DON’T! You are dealing with a fraud.
Scams are pretty common these days. If you happen to bump into a bad home deal, don’t be afraid to say no and walk away. Shop wisely!
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