Due to an alarming increase in the number of scams in the housing finance industry, is important to opt for a housing loan from a trusted lender. Unscrupulous financiers are on the look out to earn money through unfair means and hence resort to fraudulent practices.
The previous blog highlighted four ways to avoid falling prey to housing loan frauds. This blog features four additional tips that will prevent you from being a victim to such frauds.
- Beware of false property appraisals
Sometimes dealers may increase the value of the home, so as to get you to borrow a higher loan amount. In such a case, the dealer and the financier usually work hand-in-hand and partly share the amount earned. Hence, beware of such false appraisals. Enquire the ongoing property rate in the neighborhood and make the purchase only once you are assured of getting the best deal.
- Avoid lenders who stop you from considering other financiers
Some financiers may claim that no other lender will offer you a loan based on your financial position. They may state that your credit score is too low or your monthly income is not sufficient to obtain a loan from another lender. If your financier makes such a claim, do not apply for a home loan through that lender. Chances are that the lender is trying to trick you accepting a loan in order to charge a higher interest rate and earn huge profits.
- Get quotes from multiple lenders
Unscrupulous lenders may levy a higher interest rate on the loan in order to earn more profits. Remember, the interest rate is the cost of servicing the loan. Therefore, conduct extensive research on numerous lenders in the market. Select the one offering the most competitive interest rate, along with other attractive terms of the deal, like customized repayment plans, lower down payment, extended loan tenure, and lower processing fees, besides others.
- Refrain from opening unsolicited emails or text messages
A majority of emails and text messages sent by financial companies is unsolicited junk. Such emails and text messages are usually scams. Therefore, do not open such emails, links, attachments, or text messages. Furthermore, do not forward these to your close social circle or anyone else; this is because they may blame you in case they get duped.
The number of bogus financing companies is on the rise. It is, therefore, imperative to consider the aforementioned tips in order to avoid becoming a victim of home loan frauds. It is advisable to do your due diligence and sign on the dotted line only after conducting a thorough analysis about the authenticity of the lender.