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Leah TenBieg

Protecting yourself from predatory lending

Friday, October 13, 2017 - Article by: Leah TenBieg - Prospect Financial Group, Inc. - Message

Refinancing your property and/or purchasing a new home or investment property can take a toll on just about anyone. While it is much worth it, the process can be time-consuming and very detail-oriented. By working with a professional and knowledgeable loan officer, your home loan goals can be completed smoothly and swiftly. It's important to understand the different signs of predatory lending. By avoiding predatory lending at all costs, you can try to avoid any financial disasters down the road. Read below to get a better understanding of what exactly predatory lending is.

Putting it simply

To define predatory lending, it is the practice of lending that involves unfair or abusive actions during a loan process for the consumer. This can be a practice by the loan officer during a consumer's loan process that convinces them to accept deceptive, unfair, coercive, unscrupulous or exploitative actions for a loan. If a loan officer gives a borrower a loan that is not needed, this is an example of predatory lending. Also, if the loan officer is aware that the borrower cannot afford a certain loan but still gives it to them, the borrower is a victim of predatory lending. It is unfair to consumers when loan officers ignore certain signs regarding the ability to repay the loan. Another example of predatory lending is inflated fees and charges. This means the lender could hide in fine print documentation fees that are higher than what they should be.

Protecting yourself

One easy way to avoid predatory lending to research the company before working with them. Also, shop around as much as possible. You will get to see many options and you will get a good idea of where the market currently is. If a lender tries to rush the application process or charges unusually high interest rates, this can be a sign of predatory lending and you should compare with other companies before signing any papers. Don't be afraid to ask questions. This will help you learn and it will help you decide which lender is best for you.

Moreover, knowing the signs of predatory lending can protect you throughout the loan process.

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