Getting a bad home loan is something that can ruin your credit and leave your bank account empty. Bad home loans are on the rise due to the economic crisis and banks offering loans to people who can not afford them. If you are going to be purchasing a home and are getting a loan, then you need to be aware certain warning signs. There are many different warning signs when it comes to a bad home loan, but here are the top five.
A bad home loan is essentially when a lender comes to you with an offer for a loan that is not in your best interest. There are many people out there looking to take advantage of you and give you a loan that could end up costing you thousands in interest and penalties. A bad home loan can have many financial downfalls such as losing equity on your house or even resulting in a foreclosure. Bad home loans are getting more prevalent with the state of the economy and the banks issuing loans to people who should not have them. People are also looking to give you bad terms through the home loan which can leave you bankrupt or in legal trouble, so you need to know the warning signs. If you have a bad home loan, the most important thing you want to do is hire an attorney to represent you against the lender. The only way to get a bad home loan fixed is to fight it in court, where you still have a chance of being homeless or broke in the process.
Top Five Warning Signs of a Bad Home Loan
1. The first sign of a bad home loan is if the lender will not give you copies of what they want you to sign. You should always have copies of the paperwork that you will be signing at the closing, to keep for your personal financial records. If a lender will not give you a copy of the paperwork then it could mean that something is amiss with the company. The papers hold information about your rights and specific obligations you must meet, so you need these papers for your own personal reference. If these papers are not provided or the lender does not want to provide them, then it is important to stop dealing with that lender immediately and go somewhere else.
2. Pressuring you into getting a loan for more money than what you need is also a warning sign. As a borrower, you want to only get a home loan for the amount of money you will need and no more. If a lender is pressuring you into buying a more expensive type of loan then there is probably something going on with that person. A lender gets commission from each loan they give out, so by you increasing the loan amount you are essentially increasing the commission. Getting more money than you need for your home loan it will put you more in debt and will ultimately increase your interest rate.
3. If a lender is asking you to falsify information on your application then that is a really big warning sign you should stay away. Falsifying information on a document can get you fined or jailed and it is never appropriate no matter who is asking you to do it. A lender asking this of someone can only mean that they are trying to hide something or get away with something that is illegal. If you falsify this information to get a home loan, the only person it will come back on is you and the lender will not get in trouble. You could get into various types of legal trouble over falsifying documents, not to mention you could lose your house or end up paying thousands on attorney fees.
4. If you are getting a home loan, you also want to stay away from a lender telling you to sign blank documents. Signing a blank document is just as bad as giving someone you do not know a blank check and telling them to buy a loaf of bread. You can not just sign something that is blank without knowing what it is being used for or what information is going to be on the document. If a lender is asking you to sign blank documents, this probably means they are trying to get one over on you and make a ridiculous agreement. When you agree to a loan from a lender, never sign anything until it is read thoroughly by you and your attorney to make sure everything is legal and justified. Never just sign your name to a piece of paper because there are people out there willing to get over on you in a second. Do not allow a lender to fill in the blank information at a later time when you are not around, make sure you see everything the lender is writing and stating on the documents.
5. When you are dealing with a lender for a home loan, never go with someone who can not keep their word. If you have agreed to a set of terms and are getting ready to sign it but realize those terms were not what you agreed to, you know something is going on. It is not acceptable to show up at a closing with the lender handing you papers with an agreement that is different from the original. If there is new wording in the agreement or you see something you did not want in that document, you should just get up and leave. A lender should not change the wording or context of anything at the closing deal for the home loan if they are genuine and valid. If you notice odd things in the agreement or notice items you did not agree to, you should at the very least demand a good explanation. If there is a bad home loan, one of the biggest warning signs is not delivering the terms agreed upon.