Buying a new home can be very tricky on many fronts, especially when it is becoming easier and easier to fall for loan scams. Zero percent interest may look great on paper, but doing your research is always the best option to avoid being taken advantage of.
To help you spot the fakes, here are some of the most common scams people come across when applying for and accepting loans.
Under the Federal Trade Commission's Mortgage Assistance Relief Service Rule (MARS), it is illegal for a company or individual to charge advance fees for services. Even if there is the offer of a money back guarantee, avoid all upfront costs. They could be disguised as credit checks, down payments, or registration fees, so it pays to be cautious. After application, however, you might be asked to pay for a mortgage credit report and appraisal fees, but there should be nothing upfront.
Pressure to Sign Unread Documents
One rule that all homebuyers should always follow: Read the fine print. Never sign paperwork you haven't had the chance to read carefully. Legitimate housing counselors will never pressure you to sign documents before you have had the opportunity to read them. If you come across this type of behavior, you should back out immediately.
Government-Approved Loan Modifications That cost money
Always remember that you do not have to pay to receive benefits from government-backed loan modification programs. Work with your mortgage lender to see which government programs you qualify for, and take caution if it is required that you pay.
Unfortunately, these are only a few of the scams that people come across when it comes to buying a new home. You should always be cautious with your decisions especially if giving personal information to lenders and loan professionals is involved.
If you are confused about the loan process, CNE can help. We offer numerous loan products to fit your specific needs, and we will give you the tools you need to succeed.
Contact us today to see how we can help.