How to Avoid a Predatory Loan
Finding the best loan is no different than making any other purchase. Be a smart shopper! Talk with a number of different lenders. Compare their offers. Ask questions. Don't let anyone push you around!
Does the subject of home loans confuse you? Get help from a local non-profit housing service. There's a list of agencies on this website.
Remember: before you sign, know the bottom line. In a refinance, you are always free to refuse to sign the documents and to walk away from the table if you don't like the terms of the offer.
Tips to avoid becoming a victim
- Take a free homebuyer or financial literacy class. See "Counseling Resources".
- Fix your credit before you apply for a loan.
- Shop around. Compare loan rates and fees.
- Be sure to get all quotes in writing.
- Make a file and keep ALL loan documents and correspondence in the file.
- Have someone you trust (a family member, friend or attorney) review your documents before you sign them.
- Don't give in to pressure tactics. Don't sign unless you understand the terms of the loan.
- Are you refinancing your home? You have 3 days after you sign to change your mind. Use those days wisely.
- Think twice about financing the cost of credit insurance into your loan.
- When you use your home as collateral (a guarantee) for a loan, be extra careful! A bad loan can put your home in jeopardy.