Buying a home can be both an exciting and frightening financial decision. That’s because consumers often have several factors to consider when doing so. Those can include how long buyers plan to live there, job security, various market indicators and more.
According to a recent report, the Phoenix metro housing market has seen a substantial uptick, as many people are moving to Arizona from places like California for more affordable homes and an overall lower cost of living.
When prospective homeowners are looking to make a purchase, they often want a trustworthy mortgage lender on their side. While most mortgage lenders are geared towards helping consumers, industries that involve large sums of money, complicated processes and high-demand real estate markets can come with potential for fraud.
Key indicators of a predatory lender
These are some signs prospective homebuyers may want to look out for:
- They put pressure on the buyer to sign: If the lender seems to be pushy and consistent, buyers may want to ask them what could happen if they don’t immediately sign the documents.
- Their rates and fees are abnormally costly: If their rates and fees seem oddly expensive, buyers may want to ask the lender to explain their FICO score to them and call other mortgage lenders in the area to compare market rates.
- They ignore poor credit: Credit scores often play a significant role in making big purchases. If a consumer has good credit, that can make it easier for them to qualify for a loan. Those who have bad credit can still obtain a loan. However, those loans often have higher interest rates, which could put potential buyers in more financial ruin if they go through with the purchase.
Buyers should remain skeptical
Depending on the circumstances, some may not realize they’re dealing with a predatory lender until they are just about ready to purchase. If that’s the case, prospective buyers may want to leave the closing table and contact a real estate attorney. They can help clients understand their rights and get the satisfactory answers they need before signing the dotted line.