Selecting The Right Lender

While most lenders play by the rules and respect the law, there are always going to be some dirty fish in the pond. Those who follow the state and federal laws and guidelines are usually well known.

A good reason for using the services of a Buyer's Agent is that they know about the reputation of the lenders and which lender can help you in the present situation.

Taking a DIY approach - finding, purchasing home, and searching for lenders - is just not the right way to go. Use the services of a Buyer's Agent.

Predatory Lenders

Beware of "Predatory Lenders". These lenders don't care much about business ethics, many times stretch the definition of "staying within the law," and generally make a sudden disappearance; although not always.
Signs of the "wrong" type of lender may include telemarketing-style phone calls that inform you about your prequalification for a large mortgage amount; direct mail containing offers of low mortgage rates on large amounts; and placing of flyers, everywhere from your door to your car window.

What To Look Out For

Here are some things to look out for when talking to the representative of a lending company:

• High pressure selling methods.



• Very high interest rates and fees but very low payments in your original "work ups" on the numbers.



• Assurance that your credit is not an issue - every lender bases rates, fees, as well as capability to lend on your credit profile. Regardless of what the representative says, you will pay a higher rate with a bad credit record.



• If the representative assists you in completing your forms and tells you that it's ok to misrepresent yourself; particularly if they say that everybody does it. By following their instructions on the matter, you are acting against the law and committing fraud.



• The estimate provided to you by the mortgage representative is vastly different from the deal on paper. In majority of the cases, your interest rates, fees, and charges will not be the same.



• Something doesn't feel right about the company or person. Again, go with your gut instinct because it is normally right.



• Nobody is approving your application except this firm. You may hear lines such as "your credit score is not an issue if you can make the payments" and "we understand your situation".



• You are not sure about the final monthly payments they are offering but they give you their assurance that you'll be ok as they have calculated it correctly.



• The mortgage representative avoids answering your questions including ones about your FICO Score. Beware of representatives who constantly ignore or don't explain your FICO score.

What it all boils down to is that you should have a good feeling about what you decide upon and that you are comfortable with the amount you will have to pay per month. All lenders are not the same. To make sure that the lender you're dealing with is not a predator, use the talents of a real estate agent to represent you. Play it safe. At the end of the day, it's all worth it.

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