How to Spot a Bad Mortgage Loan

by Rick Jarzembowski 08/11/2019

Mortgage scams are everywhere, and many times are well disguised so they can be hard to uncover. Not all mortgage lenders have your interest at heart so when you go out for a mortgage loan, keep an eye on these warning signs and Mortgage scams are everywhere, but this time around they come like a wolf in sheep clothing, so it is pretty hard to uncover them. Not all mortgage lenders have your interest at heart so when you go out for a mortgage loan, keep an eye on these warning signs and be prepared to run away from any lender who does the following shady actions:

They pressure you to borrow more than what you want or need

Even though you are eligible for a certain sum of money that does not mean you have to spend heavily on buying a home. Paying less on a home purchase will prevent you from living from hand to mouth in your new home. An honest lender understands and will respect your choice to borrow less than you can afford instead that encouraging you to overspend or splurge on a house.

They rush you into signing documents without reading it

Getting a mortgage is complicated. There are piles of complicated paperwork, so it is crucial that you wrap your head around every document before putting your pen on it. If a lender encourages you or uses the familiar phrase "Everything is fine," it is best you withdraw yourself f from the mortgage. No matter how busy the bank may be, they would give you time to read through the papers.

They don’t give you a Good Faith Estimate

According to law, after three days of applying for a mortgage, a bank must provide a Good Faith Estimate showing your mortgage rate, closing cost, and other mortgage-related expenses. This way, a borrower will clearly understand their cost and know the estimated amount you will pay at closing. A shady lender typically does not provide this, so make sure you request one. Many banks hide this information to prevent borrowers from comparing the cost with other banks.

They use the bait and switch on you

To get more borrowers and get them excited about taking a mortgage, disreputable lenders promise borrowers one set of terms, but when it gets to closing, they deliver a different set of conditions. It is the sad truth some lenders get borrowers excited and take advantage of them when they're in a state of euphoria to alter the loan terms at the dying minute. If a lender uses this tactic on you, request an explanation. And if their reasons do not seem reasonable to you or your realtor, do not sign the mortgage documents.

They give you a blank loan form to sign

When going over mortgage document with your loan officer, be watchful for any blank forms or lines, and make sure the lender fills in all relevant information before you sign.

Getting a mortgage is not a stroll in the park. Experts recommend that you consult your attorney, local credit counseling agency or financial advisor to be on a safe side.

About the Author
Author

Rick Jarzembowski

Rick Jarzembowski’s dedicated, professional reputation in the Washtenaw County real estate market has been built on providing excellent customer service. For more than 30 years Rick has helped over 1,200 individuals and families with their Real Estate needs.

With Rick, you know you’re getting a committed professional who stays by your side throughout your entire real estate transaction, while making it an enjoyable experience.

His strong and effective business, marketing and negotiating skills are uniquely coupled with his keen ability to understand his clients' tastes and needs. Rick has been a leader in Washtenaw County real estate sales for over 30 years, yearly recognized as a top-producing agent in the County. His in-depth community and market knowledge along with his high-quality professional network have afforded him the expertise to deal with a broad array of real estate needs. He is an expert not only in residential homes sales and purchases, but also with rental investment properties, relocation transactions, new construction, and lake home sales.

Rick has served on numerous committees for the Ann Arbor Area Board of Realtors and Michigan Association of Realtors. These appointments provide him with a comprehensive understanding of housing policies and reinforce his extensive knowledge of the local housing market. He is focused on keeping up with the latest trends, laws, and technology in the real estate industry.

Rick’s dedication to his community and family is undeniable. Born and raised in Michigan, he has strong ties to this community and the state and knows the importance of investing in it. He stays connected and supports this community by volunteering with countless service organizations. He is equally passionate about investing back into the community as he is with providing exceptional customer service. He enjoys all that Southeast Michigan has to offer from sports events to the numerous visual and performing art events that frequent the area. As an avid sailor, skier, hiker, and golfer, he knows the beautiful landscape Michigan has to offer.

As his client, you’ll appreciate that as a longtime area resident and small business owner he knows and understands the community and local market. He is able to provide insightful information and strategic marketing plans for home sellers that get their home sold fast and for top dollar. Buyers can count on Rick to use his knowledge and industry expertise to help them find the perfect home in a timely manner.

Rick’s reputation has been built one client at a time by providing exceptional customer service and exceeding expectations. He is a trusted resource who has had hundreds of clients turn to him, time and time again, with their real estate needs. His industry knowledge and client focused approach have repeatedly come through for his customers. Contact him today!