1.Tells or requires you to falsify information on your application.
There is no such thing as a "little white lie" when borrowing
money. If you don't tell the truth, you could go to jail or be fined.
But even if you are not prosecuted, you could be forced to pay the loan
in full right away. Or you could be getting in way over your head and
find yourself on the street.
2. Pressures you into borrowing more money than you need. The only
reason a lender wants you borrow more than necessary is to increase
his commission. But you'll probably pay more in interest on the
extra dough than you'd earn in interest by stashing it away in a
savings account. So stick to what you need and ask for no more.
3. Pushes you into accepting monthly payments you can't afford.
Figure out whether you have enough coming in to cover all your
monthly bills, including a new or larger mortgage. And don't forget
to have a little cushion for emergencies. If your outflow is more
than your inflow, you will find yourself in trouble rather quickly.
Only Uncle Sam can get away with deficits.
4. Fails to provide you with the required loan disclosures,
you don't need to read them. By law, lenders have to tell you the
APR, or annual percentage rate, plus provide an itemized list of
closing costs within three days after you apply.
The APR is a comparison shopping tool that includes not just the
interest rate but also points, broker fees and certain other credit
charges. The list of closing fees, known as a good faith estimate,
will cover these charges as well as everything else you'll be asked
to pay at settlement.
5. Promises one thing and delivers another.
If you are presented one
set of terms when you apply for the loan and a completely different
set at closing, your antenna should wiggle and you should demand an
explanation. Actually, even if your lender explains what's going on,
it's probably a good idea to step back and take another, harder look
at what he's asking you to agree to. And be prepared to walk away
and take your business elsewhere.
6. Tells you it is okay to sign blank forms. It is never okay to sign
a blank form. Period. End of story. So don't allow the lender to
fill in the blanks later. If there is a blank, cross it out and
initial your mark.
7. Says you can't have copies of the papers you are signing. Or won't
give you copies of the documents you'll be asked to sign.
Lenders may not give you the actual filled-in papers in advance,
but they should be willing to give you blank documents that have not
yet been filled in so you can take them home and review them or show
them to a trusted advisor. If they won't, wonder if they have
something to hide....
by Lew Sichelman, Posted by Realty Times