Mortgage Refinancing How to Spot a Dirty Lender

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Mortgage Refinancing How to Spot a Dirty Lender
(presented by www.refinance-refinance.net - mortgage lenders)

By Louie Latour

If you are in the process of refinancing your mortgage the last thing you want is to be taken advantage of. Unscrupulous lenders take advantage of homeowners in a number of ways. Here is what you need to know in order to avoid these dirty lenders.

Lenders that practice predatory lending practices target homeowners that do not know they are being taken advantage of. These people include first-time homebuyers, people with poor credit, and seniors. To avoid being taken advantage of you need to do your homework and learn how to spot dirty lenders. Here are the signs that you are dealing with a predatory mortgage lender.

Forced arbitration is a tell-tale sign of a dirty lender. Never agree to an arbitration clause in your mortgage contract. If you sign a loan contract and agree to settle any disputes by arbitration you are giving up many of your legal rights as homeowner. These arbitration clauses are a license for lenders to take advantage of homeowners; never, ever, agree to arbitration.

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When you are shopping for a mortgage, keep an eye out for a prepayment penalty in the loan contract. Dirty lenders charge unnecessary fees if you refinance or sell your home. If you have bad credit it may be difficult to find a mortgage without a prepayment penalty; however, most homeowners should not accept mortgage offers that include this penalty. In addition to prepayment penalties beware lenders that require you to refinance the mortgage at a certain time. A mortgage lender may require a large amount of principal due at a certain time in the form of a balloon payment; this is designed to force the homeowner to refinance the loan and pay fees to the lender.

Lenders that charge excessive fees and interest rates are also taking advantage of homeowners. Make sure you shop from a variety of traditional and online mortgage lenders so you will know what fair interest rates, fees, and closing costs are. Agreeing to a sub-prime mortgage when you have good credit is an enormous financial !
mistake;
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This entry was posted on Thursday, May 11th, 2006 at 5:45 am and is filed under Refinance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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