Despite today’s tough times, predatory lenders are still a big problem. This is why it’s important to do your homework and research your options thoroughly before you sign that dotted line and pledge your house away.
The prospect may seem daunting, but if you know what to look out for, you’re sure to find the right deal for you. Below are 4 simple tips that will help you identify a genuine lender from a scam artist.
IDENTIFY YOUR NEEDS
Before you approach a lender, make sure you know exactly how much money you need to borrow. When you’re discussing your options with the lender, chances are you’ll be tempted to borrow more money, but a true professional would never encourage you to borrow more than you need. Even the smallest adjustment to the amount could have a significant impact on the interest rate, and the lender would know that and not push you especially if you don’t need the extra money. If that’s not a sign of trustworthiness we don’t know what is!
RESEARCH YOUR OPTIONS
While getting a loan may be a necessity for you, you should still keep from acting desperate and sign with the first lender you find. Thoroughly research your options and the different types of lenders in the market. Entities such as banks and credit unions will lend money directly whereas lenders like Citrus act as brokers and find different private lenders. You’ll have different interest rates and payment plans depending on the type of lender you go with. There’s no need to be confused though with so many options, and you should go with the option that suits your needs and limits best.
OBSERVE YOUR LENDER’S PRACTICES
Looking at how your lender operates will give you a lot of indications on his genuineness and trustworthiness. For example, most lenders allow you to apply for a pre-approved offer to give tentative terms on an offer. This process lets you see how cooperative and helpful the lender is by accommodating your needs and concerns into the offer. Another example is the interest rates that lenders may offer; if the rates are too high or too low compared to the market, chances are there’s some catch and you should be wary of accepting anything of the sort.
GET EVERYTHING IN WRITING
The most important thing to remember in dealing with any lender is that you should have any statement or promise in writing before finalizing the deal. When you’re done negotiating with your lender, make sure you have everything written down and that everything you discussed is properly incorporated in the loan agreement. If anything is missing, or some unexplained fee pops up, immediately pick it up with the lender. Understand the entire arrangement clearly and thoroughly read through each term of the agreement before you sign to make sure it’s all in there!
Hopefully the above will make your job easier and help you find a lender that is not only trustworthy and genuine but also takes all your needs into account.