If you are currently refinancing your mortgage, be sure to comparison shop between different lenders and banks. This will help you from making costly mistakes often made by homeowners applying for a home loan refinance. How can you spot predatory mortgage lenders when refinancing? Here are some tips to stop predatory mortgage lenders and the scams.

Usually, when people hear stories of predatory lenders, they typically hear about home mortgage companies taking advantage of people with bad credit, who have no other way to get a home. While this is the most popular area of the industry to find these predator lenders, there are many others whom prey upon, senior citizens, sick people, widows, and whomever does not know enough and can be taken advantage of. These homeowners often get stuck in bad mortgages with insanely high interest rates, which are often adjustable and go up even higher. This could all be easily avoided if the homeowner does some basic legwork and research on potential mortgage lenders.

Homeowners everywhere across the country are effected by predatory mortgage lenders, and race, income, credit, or age do not matter. People who disregard doing simple research on mortgage lenders risk getting taken advantage of and grossly overpaying on their home mortgage loan. Be weary of refinancing your home mortgage if any of these types of predatory mortgage lending scams are included:

-Any misleading costs or fees on the Good Faith Estimate (GFE)

-A “No or Low Cost” mortgage refinance plan which has excessive fees

-Any type of junk fees or excessive costs or charges

-Not disclosed prior mortgage prepayment penalties

-Misleading and purposefully misdirecting loans or contracts

-YSP or Yield Spread Premiums

-Deceptive home loan interest rate locks

-Shady or otherwise deceptive and not as promised advertising

The majority of mortgage lending companies are able to get away with these predatory practices due to most homeowners just not being knowledgeable and not knowing any better. When anyone closes on a home mortgage refinance deal the homeowner is typically covered in paperwork and these practices are easily hidden in the fine print anywhere on the hundreds of pages of loan details and contracts. Always ask any questions if you have any doubts, and perform research on potential mortgage lenders and banks. This is the best way to ensure you are not getting taken advantage of and are getting the best deal when refinancing your home.

-M Petrone

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