|
Be Cautious -
Be wary of anyone who calls you on the phone or comes
to your door offering “bargain loans.” Beware
of claims that the offer is good only for a very short
time. Beware of “Bad Credit, No Credit, No Problem.”
If it seems to good to be true, it probably is.
Check It Out -
If you need to borrow money for home repairs, medical
expenses, or bill consolidation, shop around. Compare
interest rates and total costs. At application, ask
for a Good
Faith Estimate, which details the total cost for
obtaining a loan, including all closing costs.
Never Act Immediately
- Say “no” to lenders who ask for up
front fees allegedly to cover a first loan payment as
part of the application. Never pay a lender cash for
an appraisal, credit report or application fee. Always
make the check payable to the company, not the individual
loan officer.
Don’t Be Afraid
To Ask Questions - You have a legal right to
know the total cost of the loan, the annual percentage
rate (APR), the monthly payment, and how long you have
to pay back the loan. Ask what the total payment each
month will be including principal, interest, tax and
insurance. Ask to have all fees explained. If you are
paying mortgage insurance, ask how long you will have
to do that.
Negotiate -
Don’t let the promise of extra cash or lower monthly
payments get in the way of your good judgment about
whether the cost you will pay for the loan is really
worth it. Don’t agree to a loan that includes extra
products you don’t need or want. Negotiate the
loan terms and agree to a loan amount only for what
you need.
Read Carefully
Before You Sign Anything - Whenever you borrow
money, do not sign anything that you don’t completely
understand. Do not be pressured into signing any loan
papers that are blank. Get copies of everything you
sign. Bring a copy of the Good Faith Estimate to closing
and question any cost that has changed.
Understand The
Terms Of Your Loan - Some loans may sound very
attractive because the monthly payment is small. But
beware, it may require a large “balloon” payment
at the end of the loan period. Know the exact dollar
amount of each total monthly payment and the total number
of payments due during the life of the loan. Also, find
out if there is a prepayment penalty. Ask if the payment
can change during the lifetime of the loan.
Use A Licensed
Mortgage Professional - Members of the Michigan
Mortgage Brokers Association subscribe to a strict code
of ethics, and because they are small business owners
who receive much of their business from “word of
mouth” referrals, they have a vested interest in
providing honest and quality service to every customer.
For additional consumer information, visit
the Consumer Section of the Michigan Mortgage Brokers
Association web site at www.mmbaonline.com.
See more articles
|
