You Might Be In A Bad Home Loan, Do You Know?

By Author: Tanya Wiseman
Total Articles: 45
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Are you in a bad home loan?

Many times people are driven by the TV advertisers to get the lowest interest rate, however it may be deceiving. You may be persuaded by the very attractive offer, however at the end it may be just the opposite. Once you lock that perfect interest rate, and agree to the terms and conditions, some lenders may come up with some various reasons to delay getting the refi. They may ask for additional paperwork and proof of reserve funds, mean time the locked rate can go up much higher then you initially signed up for.

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The plundering lenders take advantage of the low rates, aggressive marketing tactics, real estate investors, and in some cases even inadequacy of the real estate industry, which provides ideal circumstances for them to thrive.
Many people are eager to find and lock up a low rate, so they become trusting to predatory lenders.
The Federal Trade Commission warns about several signs if you sign for a bad loan:
The lender encourages you to falsify your application information to get ...
... the loan.
You have to be honest about your personal income and information at all times.
The lender urges you to borrow more then you need. It would not be towards your interest; instead it would be beneficial for the lender to gain higher commissions. You should only borrow as much as you need and not more.
The lender is pushing you to accept the payment terms, which you can not realistically meet.
You have to be realistic when you review your financial situation, to make sure that you can not only afford the large mortgage payments, but also have some money left for your personal and emergency reasons.
The lender fails to give you the required disclosures in regards to your loan. By law you have to get an itemized statement of the closing costs, and APR.
The lender shows up at closing with a totally different loan product then you agreed upon.
The loan amount and conditions should not change after you accept it.
The lender asks you to sign blank forms. You always have to read everything you sign. If the document is blank you do not sign it until you see it completed.
The lender denies you copies of your signed documents. You are entitled to get any and all copies of documents you signed pertaining to your home loan's terms and conditions.

If you are not sure about some things in regards to your home loan, you should consult an expert attorney, financial advisor, reliable real estate expert or a credit counsel.
The bottom line is, when you start dealing with the lender who promises you the rock bottom rate, which is too good to be true, chances are it is.

Also, be aware and watch out for these important items:
Pre-payment Fees. Some lenders will charge you penalties if you pay off your loan early (which may be even higher the whole amount of interest for the entire life span of the loan)
Balloon payment. It may be appealing to some when the lender sets up a very low monthly payment, with one large payment at the end. In some cases you may need another laon to pay off the large last balloon payment.
Upfront costs. Be aware of some fees, but not any high upfront costs. The lender is the one who should give you the money, not the other way around.
Stay away for any additional services that may be bundled up in to your loans like insurance policies that will protect you in case you die, however the payments for this type of coverage may be added all upfront with the interest. So, if you refinance in couple of years, you had already paid for the entire 25-30 years of insurance you can not use, or will not be able to get back.

Tanya is the publisher for this

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