In any type of market, it is obvious that some products are better than others. The case is same in mortgage. Some qualities are so poor in terms of their terms fees and interest rates that they are considered predatory. Everyone wants to stay away from predatory lending in real estate.
In mortgage loans, portrait lending is done by the broker or lender who pushes unreasonably expensive loans or refinancing deals. They may do these types of deals
- Pursue you to take a mortgage having an interest rate higher than you are financially qualified of paying.
- Talk you into borrowing more than you can afford to pay back.
- Make you falsify documents or lie on application
- Keep you in the dark about the terms of the contract
- Not giving you ample time to review and rethink the contract.
Predatory lenders lure customers into dealing by aggressive mail, phone, TV and even door to door sales tactics. Their tactics to promise your monthly payments as a way out of debt but the thing that they are not telling is that the mortgage payments will be paying more and longer. there main targets are minority communities or elderly homeowners or homeowners with little access to credit.
If someone cares about the money that he had found then he needs to avoid predatory lending. You can avoid by following ways.
- By being a well informed consumer
- Reading all the contracts carefully and paying close attention to the interest rates and consequences in the case that if you miss your late on a payment.
- Beware of misleading marketing and techniques that are high pressure.
- Know your financial limits especially in case of mortgages. The money is in your hands and only you are comfortable of the amount that you are borrowing. Predatory lending not only make you lose your money but also your house if you are unable to make the payments.
- You need to build a positive credit history. You can do that by paying your debts on time, reducing credit card balances and personal loans, keep holding the accounts that you had for a long time and having multiple credit accounts. This will make your image in front of the bank responsible. In this way you can increase your chances for having loan with low interest rates and excellent terms.
Predatory lending doesn’t only occur at the time of signing the contract but also after you’ve signed it. Some lenders are very lenient and comforting when you are sending the contract but after you signed a contract they made tempered the terms, mislead you, add unnecessary products that you didn’t agree to your unlawfully change the contract. Each case you need to beware of the terms and conditions.
Though in many states, predator lending is a crime but most of the states record it as the fault of the borrower and they take no responsibility whatsoever of the consequences. If you are in a state that regards predatory landing a crime, then you can contact your state’s attorney general office as well as a federal trade commission.