Signs For Bad Loan

Avoid any lender who:

When borrowing money, you must not mix little lie . If you lie, then you could go to jail or be fined. But even if you are not prosecuted, you could be forced to pay the loan in full right away. Or you could be getting in way over your head and find yourself on the street.

Will put you in pressure to borrow more money than you need. The reason is the lender wants you to borrow more money than necessary in order to increase his commission. But probably you will pay more interest on the extra dough than you'd earn in interest by stashing it away in a savings account. So stick to what you need and ask for no more.

Will force you to accept monthly payments that you can't afford. Check out whether you have enough coming inorder to cover all your monthly bills, including new or larger mortgage. If your outflow is more than your inflow, then you will find yourself in trouble rather quickly.

Not providing required loan disclosures, or tells you don't need to read them. By law, lenders have to tell you the APR, or annual percentage rate, plus provide an itemized list of closing costs within three days after you apply.

If yours think as a "high-rate or high-fee" loan, the Home Ownership and Equity Protection Act,will give you the additional rights and protections. For example, if total fees and points exceed a certain amount for 2003, the figure is $488 or 8 percent of the total loan amount you must get some disclosure three business days before closing.

Owing on one thing and delivers another. If you are taken for one set of terms when you apply for the loan and a completely different set at closing, your antenna should wiggle and you should demand an explanation.

Don't try to sign a blank form. Period. End of story. So don't allow the lender to fill in the blanks later. If there is a blank, cross it out and initial your mark.

Take copies of the papers you are signing. And if the lender won't give you copies of what you've signed at closing, cancel the deal right then and there. These papers contain important information about your rights and obligations. If your lender doesn't want you to have a set, something's terribly wrong.