If the deal seems to good to be true it probably is too good to be true. Ask Questions! Compare! Avoid loans that come looking for you. If it sounds to good to pass up, get it in writing.

 

Talk to more than one lender. A deal may sound good but is it the best loan you can qualify for. Be sure you compare and compare similar loan products.

 

Understand the loan terms. Compare the APR (annual percentage rate) of loans from different lenders. The APR takes into account both the interest rate and the points and fees of the loan. A nonprofit housing counselor or a lawyer can help you review the information.

 

Beware of prepayment penalties. A prepayment penalty may be a choice but should not be a requirement. 

 

Make sure documents are correct. Be cautious of anyone that offers to falsify income information to qualify for a loan. Borrowers should never falsify information or sign documents that they know to be false.

 

Make sure documents are complete. Do not sign documents that have incorrect dates or blank fields. Be wary of promises that a lender will "fix it later" or "fill it in later."

 

Ask about additional fees. Question any items you didn't ask for. Beware of single premium credit insurance. Review every fee and compare different lenders' fees to ensure the most competitive loan terms.

 

Understand the total package. Ask for written estimates that include all points and fees. The situation may not seem abusive until you get to the closing table. If any fees or charges differ from what was previously disclosed, delay the closing until all terms of the loan are clearly understood.

 

Work with credit counselors. A borrower should get all the facts before deciding to combine credit card or other debts into a home loan. Beware of scam credit counseling/ credit consolidation agencies  unfortunately, not all credit counseling agencies are acting in your best interests. Talk to a community based consumer credit counseling agency or housing counselor before signing the loan documents.

 

Protect home equity. If borrowers are taking equity out of their property, they should take out the minimum amount needed. The equity in a home is a source of wealth, which builds up slowly over time.

 

If your not sure, don't sign! Get advice first! Talk to a community based consumer credit counseling agency or housing counselor.